India’s retail inflation decelerated to 6.77% YoY in Oct-22 from 7.41% in Sep-22.
Download ReportOct-22 CPI Inflation - Slow grind lower commences
India’s retail inflation decelerated to 6.77% YoY in Oct-22 from 7.41% in Sep-22. Despite moderation in headline inflation, sequential momentum remained strong on account of food and core items, thereby pointing towards the role of favorable base effect and likelihood of stickiness in the upcoming inflation numbers. Although headline inflation is projected to decelerate to 6.2% in H2 FY23 from 7.2% in H1 FY23, the MPC will remain cautious and likely opt for 35 bps hike in the upcoming policy review in Dec-22 to provide adequate level of real interest rate anchor. The RBI is expected to pause thereafter for impact assessment as projection for CPI inflation gets comfortable in the 5.0-5.5% range going into H1 FY24.