India’s CPI inflation rose more than expected in Sep-22, firming to the highest level in 5-months of 7.41%YoY
Download ReportSep-22 CPI Inflation - 'Cereal' killer on board
India’s CPI inflation rose more than expected in Sep-22, firming to the highest level in 5-months of 7.41%YoY. The upside was unsurprisingly driven by a strong momentum in food, with broad based price pressures seen across sub-categories of Cereals (predominant), Vegetables, Pulses, Spices and Meat & Fish. Cereal prices yet again saw a strong build-up of 2.0%MoM in Sep-22 over and above the 2.4% in Aug-22. With the monsoon season well behind us, we believe that risks to food inflation are now stacked on the upside due to a host of reasons: seasonal, global and administrative. As such, we revise our FY23 CPI forecast up by 20 bps to 6.7%, as a possible upside in food may not get fully offset by some comfort on fuel at the margin i.e., if the recent softening in global crude oil sustains with price remaining in the USD 90-100 pb range.