Inflation Forecast: Decline to 5.50% likely in September amid softening food prices, poll finds
Follow our Markets LIVE here The average expectation is for inflation to come down to 5.50 percent in September from 6.83 percent in August. Projections varied between 5.10 percent and 6.90 percent. Also, more than three-quarters of participants foreseeing inflation to drop below the upper limit of the target range set by the central bank.
During its last Monetary Policy Committee (MPC) meet announcement on October 6, RBI Governor Shaktikanta Das said the central bank has maintained its current monetary policy for the fourth consecutive meeting. Also Read: September retail inflation likely fell to 5.4%: Mint poll The RBI indicated that interest rates would stay elevated until inflation approached 4 percent, which is the midpoint of the central bank's target range of 2-6 percent. Notably, increases in food costs, constituting approximately half of the CPI, are gradually diminishing after the government implemented measures to enhance supply.
Dhiraj Nim, an economist at ANZ Research told Reuters the impact of vegetable prices is “diminishing" as their prices, including of tomatoes, “have significantly corrected". He however added, “the persistent issue in food inflation remains with cereals, pulses, and spices, and it seems that the RBI may have limited influence on this matter." Also Read: Wall Street week ahead: Investors eye inflation data, Fed minutes Additionally, the surge in crude oil prices is expected to contribute to sustained inflation. India is the world's third-largest oil-importing nation.
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