India’s September Retail Inflation at 7.4%: Deutsche Bank

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The RBI’s inflation target is 4%, with a tolerance of 200 basis points on both sides.

Mumbai:

Total retail inflation is expected to rise to a five-month high of 7.4% in September, with the risk of moving higher if food and vegetable prices pick up further in the rest of the month, Deutsche Bank said.

“Our nowcasting exercise shows that CPI inflation is tracking about 7.4% yoy in September, versus 7.0% yoy in August,” India’s chief economist Kaushik Das said in a Sept. 20 note.

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Retail inflation remained above the Reserve Bank of India’s upper tolerance margin of 6% for eight straight months through August.

The Foreign Bank expects inflation to average 7% in October-December and 6.4% in January-March, with a full-year average projection of 6.9%, which is higher than its estimate of 6.7 % of the RBI.

The RBI’s inflation target is 4%, with a tolerance of 200 basis points on both sides.

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Deutsche Bank expects core inflation to stand at 6.1% in September and average 6% for the current fiscal year, with risks pointing upward as services-related inflation could gain momentum in the coming months.

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