India: Inflation comes in at highest level since April in September
Inflation came in at 7.4% in September, up from August’s 7.0%. September’s figure marked the highest inflation rate since April. The result was driven by rising prices for food and beverages.
Annual average inflation rose to 6.4% in September (August: 6.2%).
Finally, consumer prices rose 0.57% from the previous month in September, picking up from August’s 0.52% rise. September’s uptick was the highest reading since May.
ING’s Robert Carnell commented on the outlook:
“What this inflation release did not do, was suggest that Indian inflation is running out of control. The last four months of inflation increase on a sequential monthly basis, have been fairly steady at around 0.5-0.6%. Even if the price level continued to rise at this pace, year-on-year inflation would slowly drift down to around 6%, and there are good reasons to believe it will slow more than that. In fact, as soon as next month, inflation should fall back into the mid-range of 6%, and besides a brief uptick over the December-January period – entirely due to base effects, we see inflation easing back to around 5.5% by March next year.”