‘September retail inflation likely fell to 5.4%’
NEW DELHI : India’s retail inflation likely dipped to 5.4% in September from 6.8% in August largely due to a correction in vegetable prices that had pushed up inflation in the preceding two months, showed a Mint poll of 18 economists. The official data is set to be released on Thursday.
The poll predicts September’s consumer price inflation (CPI) to range between 5.1% and 6.5%, with all but two economists expecting inflation to exceed the upper-tolerance limit of the Reserve Bank of India’s (RBI’s) inflation target. Should inflation come as projected in September, the average for July-September would be 6.6%, marginally above the RBI’s latest projection for the quarter released last week.
The central bank was forced to raise the projection to 6.4% from 6.2% earlier due to the elevated prints in July and August. “Vegetable inflation decelerated in the month (September), while ‘stickier’ components like foodgrains, sugar etc continued to retain gains," said Radhika Rao, economist at DBS Bank.
“Non-food trend should benefit from lower cooking gas prices whilst domestic subsidized retail fuel prices stay shielded from high global crude oil levels." Core inflation, which excludes volatile items like food and fuel, is expected to remain stable, which is good news for the RBI, which is under pressure to control inflation due to rising crude oil and food prices. Items such as food and fuel, to continue to remain stable, providing a relief to the RBI, which is still under a lot of pressure to keep inflation in check amid rising crude oil prices and elevated food prices.
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