Inflation data based on Wholesale Price Index (WPI) for September is estimated to come in at 3.1 percent against 3.7 percent on a month-on-month basis on a lower primary and fuel inflation.
The August WPI hit a five-year low at 3.74 percent courtesy declining vegetable prices and other food articles. Food inflation in August hit a lowest level since January 2012.
The consumer price inflation data for the month of September, which was released yesterday, cooled off to its all-time low of 6.46 percent, the lowest since India started computing consumer price index (CPI) in January 2012, led by lower food prices and fuel costs. The food inflation trimmed down to 7.67 percent against 9.42 percent month-on-month. The vegetable price inflation lowered significantly to 8.59 percent versus 15.15 percent from August.
What to expect
The favourable base effect is likely to continue. Sector wise, manufacturing inflation is expected to be lower at 3.14 percent against 3.45 percent on a month-on-month basis, which is expected to keep core inflation muted as well. Primary inflation too is expected to softened to 3.7 percent against 3.9 percent (MoM) on the back of a sharp decline in food prices at the wholesale level. Moreover, the fuel inflation is likely to trend lower as well – to 2 percent - due to petrol price cuts and fall in crude.
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