scorecardresearchIndia October inflation might have cooled below 7%: Mint poll

India October inflation might have cooled below 7%: Mint poll

Updated: 10 Nov 2022, 09:26 AM IST
TL;DR.
Despite moderation, the retail inflation will still be above the upper limit of the Reserve Bank of India's inflation target range of 6% for the tenth consecutive month.
India's central bank has raised interest rates by a cumulative 190 bps since May to curb rising inflation.

India's central bank has raised interest rates by a cumulative 190 bps since May to curb rising inflation.

A favourable base effect in some key components such as food prices is likely to bring India's retail inflation for October slightly lower.

The retail inflation of India might have cooled to 6.7% in October from September’s five-month high of 7.41%, reported Mint, quoting its poll of 22 economists.

"The moderation is explained by the fact that headline, as well as food inflation in September 2021, touched a multi-month low," the report said.

However, despite moderation, the retail inflation will still be above the upper limit of the Reserve Bank of India's inflation target range of 6% for the tenth consecutive month.

As per a Nirmal Bang Institutional Equities report, CPI inflation (retail inflation) is seen at 6.54% in October. Core CPI inflation is seen at 5.71% in October versus 6.08% in September. Wholesale Price Index or WPI inflation is likely to come in at 8.6% in October, down from 10.7% in September, supported by a high base.

WPI core inflation is seen at 5.5% in October, down from 7.3% in September, supported by a high base and largely flat input costs on a month-on-month basis, said Nirmal Bang.

India's central bank has raised interest rates by a cumulative 190 bps since May to curb rising inflation.

The RBI is expected to raise rates in its December policy meeting too.

Food inflation jumped nearly 100 basis points in September, and the unseasonal rains that the country witnessed in the previous two months are expected to keep food prices sticky, reported Mint.

Disclaimer: The views and recommendations given in this article are those of individual analysts and broking firms. These do not represent the views of MintGenie.

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First Published: 10 Nov 2022, 09:26 AM IST