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India WPI Inflation May Breach 12 Percent And Retail 6 Percent In October Says Ind-Ra
- •India Ratings and Research predicts wholesale inflation could exceed 12 percent and retail inflation could breach 6 percent in October due to adverse base effects, weather conditions, and energy price shocks.
- •Wholesale inflation is expected to remain in double digits and stay under pressure at least until February 2027.
- •Ind-Ra Chief Economist Devendra Kumar Pant stated that the Reserve Bank of India could raise policy rates by 50 to 75 basis points in the current tightening cycle.
- •Wholesale inflation rose to 11.39 percent in September while retail inflation climbed to a 23-month high of 5.54 percent during the same period.
- •Key drivers for the inflation surge include immediate responses to energy and petroleum prices, weak currency, and global market pressures.
Key Questions Answered
India Ratings and Research (Ind-Ra) projected that India's wholesale inflation could accelerate to over 12 per cent and retail inflation could breach 6 per cent in October 2026 due to adverse base effects, weather conditions, and energy price shocks.
India's wholesale price index-based inflation rose to a series high of 11.39 per cent in September, up from 9.92 per cent in August. Meanwhile, retail inflation rose to a 23-month high of 5.54 per cent in September, up from 4.83 per cent in the previous month.
The Reserve Bank's monetary policy committee hiked benchmark policy rates by 25 basis points to 5.50 per cent, marking its first rate hike since February 2023. Ind-Ra also noted that the RBI could further raise policy rates by 50 to 75 basis points in the current tightening cycle.
