Now Reading: India’s retail inflation may top 6% in Oct-Nov, says SBI report
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India’s retail inflation may top 6% in Oct-Nov, says SBI report
India’s retail inflation may top 6% in Oct-Nov, says SBI report
India's retail inflation could briefly rise above 6% in October and November before easing to around 5% in the fourth quarter of FY27, according to an SBI Research report. The report expects…
India's retail inflation could briefly rise above 6% in October and November before easing to around 5% in the fourth quarter of FY27, according to an SBI Research report. The report expects August inflation to hit 4.7%, up from 4.45% in July, driven by food prices. It noted that improving food supply, a recovering monsoon, and a positive Indian Ocean Dipole may help contain price pressures.
Kharif sowing is only 2% below last year despite below-normal rainfall in some states, indicating better irrigation. The report also flagged concerns about RBI communication, saying markets should focus on policy actions like variable rate reverse repo operations and FCNR(B) deposit mobilisation over forward guidance. RBI Governor Sanjay Malhotra has said the central bank needs more clarity on inflation before recalibrating rates.
Indian Opinion Analysis
The SBI report's warning of a brief spike above 6% comes at a critical time, as the RBI's Monetary Policy Committee has held rates steady for five consecutive meetings, awaiting clearer inflation signals. The August print of 4.7% would still be within the RBI's 2-6% tolerance band, but a breach of 6% in October-November could delay any rate cut to early 2027. Food inflation remains the wild card: kharif sowing data suggests resilience, but weak rainfall in key states like Uttar Pradesh and Madhya Pradesh could still disrupt supplies. The positive IOD may offer a partial buffer against El Nino, but its impact on winter crops is uncertain. Markets will watch the next CPI release and the MPC's October meeting for clues on whether the central bank shifts its stance.
Key number to watch: the August CPI print due mid-September.
Source: retail.economictimes.indiatimes.com
This story was synthesised by AI from the source linked above.
