"The excessive rainfall in early October 2022 may adversely impact the kharif harvest and delay rabi sowing, thereby posing a material upside risk to the food inflation outlook. The quantum of the next rate hike will be determined by how much the inflation print recedes in October 2022, as well as the strength of the GDP growth for Q2 FY23. "Another rate hike is certain in the December 2022 MPC review, after the uncomfortable inflation print of 7.4% for September 2022. Both monetary and fiscal policy have to turn restrictive." ADITI NAYAR, CHIEF ECONOMIST, ICRA, GURGAON Policy makers will have to take action to restrain import intensive domestic demand through taxes and trade policy. "We maintain that even if inflation print comes off, inflation risk is growing in the form of wide external trade deficits. Coupled with an expected exports slowing, the overall impact on growth might be more than our current expectation." PRITHVIRAJ SRINIVAS, CHIEF ECONOMIST, AXIS CAPITAL, MUMBAI "The lower than expected IIP growth corroborates the narrative of a volume based slowdown, indicating stress in lower income households. This will require continued monetary policy tightening, but the magnitude will depend on balancing growth and exchange rate considerations. However, price momentum still remains broad-based. "CPI inflation printed close to our and Street forecasts. We expect the RBI to hike repo rate by 35-50 bps in December, with the next move being more data dependent." SAUGATA BHATTACHARYA, CHIEF ECONOMIST, AXIS BANK, MUMBAI The unseasonal rains are further expected to keep the food prices volatile. The surge in prices of cereals, vegetables and pulses is continuing into October as well. "Although broadly in line with expectations, the CPI data continues to remain elevated. UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI The latest data shows retail inflation remaining above the Reserve Bank of India's target for three quarters, implying it will have to report to the government why it failed to meet the target, and what actions it will take. BENGALURU, Oct 12 (Reuters) - India's retail inflation accelerated in September to a five-month high of 7.41% year-on-year, driven by surging food prices, raising fears of further rate hikes when the central bank meets for its next policy review in December.Īnnual retail inflation (INCPIY=ECI) in September was higher than the 7.3% forecast in a Reuters poll of economists, and above 7% the previous month, data released by the National Statistics Office on Wednesday showed.
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