Expert Views: India's consumer inflation eases to 3.28 percent in September

Last Updated: Thu, Oct 12, 2017 18:29 hrs
Retail Inflation (Reuters image)

India's annual consumer inflation in September marginally eased to 3.28 percent from a year ago, while industrial output grew 4.3 percent in August from a year earlier, government data showed on Thursday.

Analysts polled by Reuters had expected retail inflation to edge up to 3.60 percent last month from 3.36 percent in August.

Economists surveyed by Reuters had forecast 2.4 percent growth in output compared with a revised 0.9 percent year-on-year increase in July.



"Contrary to street expectations, CPI has fallen sequentially despite the fact that favourable base effect has unwound. This primarily reflects weaknesses in aggregate demand. Even services inflation has moderated marginally."

"Primary contributors to September inflation are housing & fuels categories, which have hardened due to HRA effect on housing & global crude price effect on fuel prices. This means inflation trajectory remained well below the RBI target in H1, FY18."

"Yet, the chances for rate cut look distant as IIP growth has accelerated to 4.3 percent, albeit due to a favourable base effect in capital goods & mining sectors."

"In my opinion, IIP growth will not sustain at this level, as base effect will keep shifting. My IIP forecast was 5 percent - closest to the actual."

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