Retail inflation may rise
STORIES, ANALYSES, EXPERT VIEWS
Food price pressures are seen to have continued in September while core inflation too could rise due to stronger demand conditions. Analysts expect retail inflation, as measured by the consumer price index, to rise to 5% again in September.
Bank of Baroda assessment: Bank of Baroda in a recent report said it expects CPI to settle around 5.1% in September 2024, with risks tilted to the upside. “High frequency price data in both September 2024 and October 2024 reflect build-up in price pressure. However, a lot is attributable to seasonal phenomenon…..” said Dipanwita Mazumdar, Economist at Bank of Baroda in the report.
Retail inflation in August was at 3.65%, the second consecutive month when it was at less than 4% and the second lowest in the last five years. Prior to that, it was at 3.6% in July 2024 and at 5.08% in June 2024. Official data on CPI inflation in September will be released on October 14.
DBS Bank assessment: Radhika Rao, Executive Director and Senior Economist at DBS Bank said, “Passage of base effects and an uptick in perishable food items due to volatile weather are expected to lead headline inflation up to 5% YoY in September”. She further said that other food sub-segments like rice and key protein sources moderated in the month, along with contained imported price pressures as global oil prices stay capped despite rising Middle East tensions. She added core CPI is expected to elevate telecom tariff and gold prices but undershoot the headline CPI pointing to modest pricing power.
Crisil’s assessment: The continued upsurge in vegetables was also highlighted by Crisil’s. The monthly indicator of food plate cost highlighted that on-year, the cost of home-cooked veg thali rose 11%, while that of the non-veg thali declined 2%.
