India’s annual retail inflation rose to 4.48% in October from 4.35% within the earlier month, authorities knowledge launched on Friday confirmed. Analysts in a Reuters ballot had predicted annual inflation at 4.32%.
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Radhika Rao, Economist, DBS Bank, Singapore
“October CPI inflation registered a modest increase from September at 4.5% y/y, despite favorable base effects, validating our expectations that a moderation in inflation in late-3Q was unlikely.”
“Base effect has placed average CPI in Sep-October 21 within 4-5% at the upper end of RBI’s target range, but trend in late-2021 and 1Q22 on higher input prices, pass-through of imported energy cost, bridging the production gap and seasonal encounters of food/pear.”
“While support measures such as cut fuel excise duty and import tax cut have offset part of the near-term pressures, a broad spurt in inflation is likely to prepare the ground for a reverse repo rate hike following the central bank’s change in policy stance. “
While a reduce in excise obligation on petrol/diesel will present reduction to inflation, greater international commodity costs, together with vitality costs, will pose a menace to inflation sooner or later.
Rajni Sinha, Chief Economist and Director of National Research, Knight Frank India, Mumbai
“While the CPI is at a cushty stage round 4%, inflationary considerations stay with excessive core inflation. While a reduce in excise obligation on petrol/diesel will present reduction from inflation, greater international commodity costs, together with vitality costs, pose a menace to future inflation.
“Even as economies return to normalcy, some provide constraints stay, and moreover there’s a danger of demand facet pressures on inflationary power. Globally additionally provide constraints and The inflation danger is rising because of greater commodity costs.”
“While the RBI will remain cautious of inflation risk, the central bank is likely to be gradual in its policy normalization under the current circumstances.”
Roopa Riga Nitsure, Group Chief Economist, L&T Finance Holdings, Mumbai
“I don’t think the RBI’s MPC will get any negative surprises from the poor growth-inflation mix that was reported today. In fact, the RBI governor is warning about a disparity in economic growth and a rising trend in core inflation.”
“Based on today’s print, I expect the MPC to continue with the normalization of liquidity at the same pace in December 2021 without raising the reverse repo rate.”
Prithviraj Srinivas, Chief Economist, Axis Capital, Mumbai
“October CPI was slightly higher than expected with sequential price pressures across the fresh food, fuel and transportation components. Most core components showed weak sequential seasonally adjusted pace except ‘personal care and impact’ where the pace of inputs increased The price passes.”
“Input worth pressures on gasoline tax cuts and normalization in climate circumstances are more likely to ease within the coming months. However, we see inflation shifting nearer to five% over the subsequent 18 months as normalization in exercise is already underway. Maintains pass-through of excessive enter costs.
Input worth pressures are more likely to ease within the coming months on gasoline tax cuts and normalization of climate circumstances
SAKSHI GUPTA, SENIOR ECONOMIST, HDFC BANK, GURUGRAM
“Inflation in October was greater than anticipated pushed by greater meals (particularly vegetable) and gasoline costs. That stated, inflation nonetheless stays snug (4.5%) and India finds itself at the next fee than the remainder of the world. finds the candy spot the place inflationary pressures have elevated considerably.”
“We expect headline inflation to remain stable for the coming months, especially with the recent cut in excise duty. However, core inflation may remain close to 6%, especially with demand pick-up.”
Garima Kapoor, Economist – Institutional Equities, Elara Capital, Mumbai
“While the October inflation print was comfortably below 5% and fully in line with our expectations, a major upside risk remains to see near-term headwinds with respect to food price inflation due to shortage of fertilizers.”
“While the latest cuts in excise obligation and VAT supply reduction within the close to time period, we may also be cautious of volatility in international vitality costs. We keep our FY22 CPI inflation forecast at 5.4%, by which the upside danger has grow to be extra pronounced.”
Vivek Kumar, Economist, Quanteco Research, Mumbai
“Building under gradual price pressure for food is no longer a cause for concern as the upcoming kharif production and excise duty cut on diesel may ease the burden in the coming months.”
“However, core worth pressures stay elevated and sticky because of greater enter worth inflation amid gradual opening up of the economic system. We anticipate FY22 CPI inflation to reasonable at 5.6 per cent in opposition to RBI’s estimate of 5.3 per cent. will likely be greater. %.”
SREEJITH BALASUBRAMANIAN – ECONOMIST, IDFC AMC, MUMBAI
“October headline and core CPI prints were in line with our expectation, with key drivers being strong sequential growth in food prices (especially of vegetables), continued stickiness of the core basket and a slightly higher pace of housing prices.”
“Given the rise in real-time knowledge this month additionally, monitoring of vegetable costs is warranted. While the direct impression of the gasoline worth reduce will likely be seen from November, its oblique impression will likely be because of stress on producer margins, providers inflation and trajectory. Will be in context. Oil and different commodity costs may also be essential.”
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With inputs from NDTV
