New Delhi,oct 15
The soaring figures of retail inflation in September could force the Reserve Bank of India (RBI) to continue with neutral stance for a longer duration, stated SBI research, adding that “first rate cut could be based on growth, and need not be inflation.”The research stated on the rationale that if inflation remains sketchy in the coming months, the apex bank will consider growth as the criteria for rate cut. “Looking ahead, evolving food prices will determine domestic inflation, though we understand an average print in the range of 4.5-4.6 per cent for FY’25 (with an upside bias) looks more plausible, despite the outlier reading of today,” the report added.The Consumer Price Index (CPI)-based inflation rate for September reached 5.49 per cent from 3.65 per cent in August, reflecting an uptick primarily due to higher food prices. In September, the food and beverage inflation increased to 8.36 per cent, from 5.30 per cent in August and 6.30 per cent in Sep’23. Within food, vegetable prices increased significantly and contributed 2.34 per cent to overall inflation. Rural and urban food inflation stood at 9.08 per cent and 9.56 per cent, respectively, suggesting that food prices continue to pose a challenge for households. The spike in food inflation was driven largely by elevated prices in specific food categories.
