(Reuters) – India’s annual retail inflation eased to a three-month low in September on softer food prices, government data showed on Thursday.
The South Asian country’s annual retail inflation rose 5.02% in September from 6.83% the previous month. A Reuters poll of 66 economists had forecast a rate of 5.50%.
COMMENTARY:
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
“The CPI inflation moderated more than our expectations. The softness has been broad-based across perishables and core inflation. However, higher crude oil prices and persistence of price pressures on cereals and pulses remains to be watched for.”
“Overall we expect the monetary policy committee (MPC) to remain in a prolonged pause mode at least through mid next year, while ensuring short-term rates remain high through tighter liquidity conditions in order to buffer for the adverse global cues.”
GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA CAPITAL, MUMBAI
“Going forward, even as perishable food prices continue to ease, we expect non-perishable food prices to remain sticky.”
“Amid continued focus on managing liquidity with the announcement on possible open market operations (OMO) sales… and emphasis on CPI target being 4.0%, we expect the MPC to hold rates throughout this fiscal year. With inflation expected to moderate closer to 4.0% by Q2FY25E, we expect the first repo rate cut by Q2FY25.”
(Reporting by Rama Venkat; Editing by Sohini Goswami)
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