The translation of the heading to English is: "India's retail inflation again exceeds the RBI target.

  • Indian retail inflation exceeds the RBI's 4% target in September.
  • Price Increases in Food and Other Costs Heighten Inflationary Pressure.

Eulerpool News·

India's retail inflation likely exceeded the Reserve Bank of India's (RBI) medium-term target of 4% in September for the first time since July, driven by persistently rising vegetable prices and a lower base from the previous year, a Reuters poll revealed. Specifically, vegetables and perishable foods, which constitute a significant part of household expenses, became more expensive after heavy rains limited the availability of essential crops. A high base effect from the previous year, which helped lower inflation in July and August, had the opposite effect last month. According to the survey of 48 economists from October 3 to 9, retail inflation in September, measured by the Consumer Price Index (CPI), likely rose to 5.04% year-on-year, compared to 3.65% in August. Forecasts ranged from 3.60% to 5.40%. The data is to be released on October 14. Insights from Dipanwita Mazumdar, an economist at the Bank of Baroda, point to the continuous price increase, particularly in tomatoes and onions. Additionally, cooking oil prices are rising due to international developments. These factors could further elevate the overall inflation pressure. A separate Reuters poll shows that inflation could average 4.6% in the current quarter and 4.5% in the current fiscal year, above the central bank's target of 4%. Meanwhile, core inflation, which excludes volatile items such as food and energy, is expected to rise to 3.50% in September from 3.30% in August. This is partly due to increases in telecommunications tariffs and higher gold prices. Rahul Bajoria, head of economic and ASEAN research for India at Bank of America, sees the persistent weakness of the core CPI as a sign of growing economic sluggishness. Price cuts in vehicles and recent results from consumer goods companies underscore this trend. A moderate core inflation could give the RBI the leeway to start rate cuts from December. Gaura Sengupta, chief economist at IDFC Bank, noted that the central bank, supported by positive data on food prices and potential rate cuts from the US Federal Reserve, could under these conditions ease its monetary policy through a gentle rate-cutting cycle.
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