CPI inflation rises to 3.77% in Sept
India’s retail inflation rose marginally in September, nudged up by food and fuel prices, but short of the central bank’s 4% medium-term target, strengthening views it could tighten monetary policy in December following unchanged rates last week.
In September, consumer prices rose 3.77% from a year earlier, compared with a 3.69% increase in August, the statistics ministry said on Friday.
For September, the median forecast of economists polled by
Reuters was 4%, with estimates ranging from 3.60% to 4.70%.
CPI inflation has started inching up on the back of rising prices of food and other goods and services, said Rupa Rege Nitsure, chief economist at L&T Finance Holdings.
“Given the massive depreciation of the rupee and elevated crude oil prices, RBI will have to resort to policy rate signals sooner than later.”
Slower inflation in food prices, which make up nearly half of India’s consumer price index (CPI), has so far cancelled out rises in imported goods following the weakening rupee.
Food inflation rose to 0.51% from a year earlier, against 0.29% in August.
Core inflation, which excludes volatile food and fuel sectors, was seen at 5.8%, down from around 6% in August.
The RBI has projected inflation of 4.8% by June 2019, slightly lower than its August forecast of 5.0%. It has raised its policy rate 50 basis points since June, and is widely expected to raise rates by at least 25 basis points more this year.