By Nikunj Ohri and Sarita Chaganti Singh
NEW DELHI (Reuters) – India’s retail inflation jumped to 5.49% in September, the highest in nine months, driven by rising food prices, according to government data.
This increase follows 3.65% in August and exceeds economist predictions of 5.04%. The last time inflation was higher was in December 2022 at 5.69%.
The Reserve Bank of India (RBI) predicts inflation will ease in the coming months, targeting an average of 4.5% for 2024-25. The RBI’s goal is 4%.
Food inflation surged to 9.24% in September, compared to 5.66% in August, with vegetable prices rising 36% year-on-year. Cereal inflation fell to 6.84% while pulses rose to 9.89%.
Economist Garima Kapoor noted that rising inflation was due to favorable previous year comparisons fading and supply chain disruptions from adverse weather.
RBI Governor Shaktikanta Das highlighted ongoing risks from weather, geopolitical tensions, and rising commodity prices, especially with global oil prices nearing $80 a barrel due to Middle East conflicts.
HDFC Bank economist Sakshi Gupta mentioned that inflation worries persist, particularly with high commodity prices and unseasonable rains threatening crops ready for harvest.
Core inflation, which excludes volatile items, was reported at 3.5%, up slightly from August’s 3.3%-3.4% range.
Gupta suggests that a rate cut by December seems unlikely, depending on commodity price trends, but expects inflation to fall below 5% by the end of 2024.
(Additional reporting by Nishit Navin and Hritam Mukherjee in Bengaluru; Graphics by Vineet Sachdev; Editing by Janane Venkatraman)
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