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Inflation to Surge Past 6.5% in Oct-Nov, RBI Rate Hike Expected: SBI Research
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Firstpost•02-10-2026, 14:34
Inflation to Surge Past 6.5% in Oct-Nov, RBI Rate Hike Expected: SBI Research
- •SBI Research predicts India's consumer price inflation will reach 5.65% in September and exceed 6.5% in October-November, before easing below 6% in early 2027.
- •The report suggests a 25-basis-point repo rate hike by the Reserve Bank of India at its October 5-7 policy meeting due to rising inflation and global risks.
- •Inflationary pressures have broadened, with 51 commodities contributing to 90% of CPI inflation in August, up from 22 in January.
- •Weakness in the Indian rupee, driven by a strong US dollar and FPI selling, poses a significant risk to the inflation outlook.
- •Risks from a weak monsoon and potential impact on Rabi crops could further fuel food inflation, leading SBI Research to expect an upward revision in RBI's FY27 inflation projection.
Key Questions Answered
SBI Research cited rising inflation, global macroeconomic risks, shifting liquidity conditions, repricing of global market risks, and downward pressure on the Indian rupee as the main catalysts for an anticipated 25-basis-point repo rate hike.
Consumer price inflation is anticipated to hit 5.65 percent in September, exceed 6.5 percent across October and November, and subsequently decline to under 6 percent by early 2027.
The 2026 southwest monsoon reached only 87 percent of its long-period average with 43 percent of districts experiencing deficient rainfall, which, alongside robust El Nino conditions and low October rainfall, threatens Rabi crop output and food inflation.
