India inflation eases significantly in August. Is the worst behind?
Live MintConsumer Price Index -based inflation, or retail inflation, moderated to 6.83 per cent in August from a 15-month high of 7.44 per cent in July, thanks to a fall in vegetable prices, offering relief to the Reserve Bank of India and bond investors even though it remained above the RBI's target range of 2-6 per cent. As Mint reported earlier, quoting data released by the Ministry of Statistics and Programme Implementation, food inflation, measured by the Consumer Food Price Index, which accounts for nearly half of the overall consumer price basket, slowed to 9.94 per cent in August from 11.51 per cent in July. We see FY24E inflation at 5.2 per cent against RBI's estimates of 5.4 per cent, with the RBI to keep rates on hold ahead, and not precede the Fed in any policy reversal in CY24," Arora said. In view of the higher-than-expected incoming data and rainfall deficit, we see upside risks to our FY24 headline CPI forecast of 4.5 per cent, said Nuvama.