India inflation likely accelerated in September on food and energy pressures
INDA•India’s consumer inflation likely rose to 5.40% in September from 4.82% in August, a poll of 41 economists showed, as food and energy costs increased. Wholesale inflation was forecast to edge up to 10.18% from 9.92%.
1. Consumer prices rise
The median forecast in an October 5-7 poll of 41 economists put annual consumer inflation at 5.40% in September, up from 4.82% in August. Forecasts ranged from 4.90% to 5.90%; if realized, it would be the fourth consecutive month above the Reserve Bank of India’s 4% medium-term target and the highest this year under the current series.
2. Food and energy pressures
Economists cited elevated food prices and higher energy costs. Food and beverages account for about 40% of India’s consumer price index basket, while a deficient monsoon has driven up food prices and crude oil prices have risen above $100 a barrel. Core inflation was expected to reach 4.3%, though India’s statistics agency does not officially publish core inflation data.
3. Rate and wholesale outlook
The RBI raised its repo rate by 25 basis points to 5.50% on Wednesday, its first hike in nearly four years, and signalled possible further tightening. The poll also forecast wholesale inflation rising to 10.18% in September from 9.92% in August.
