Mumbai: Inflation in India likely cooled further in October, increasing the chance of another interest rate cut from RBI, a Reuters poll found. However, elevated food prices mean the consumer price index, due to be released at 12 pm on Tuesday, is unlikely to fall below the central bank’s medium-term target anytime soon.
The median consensus from the poll of 22 economists pegged it at 4.20 per cent for October compared to a year earlier, lower than 4.31 per cent in September. That would be the mildest reading since August 2015. “A moderation in food prices like in August and September didn’t happen in October. In fact, on a sequential basis there was a marginal uptick in food prices,” said Tushar Arora, senior economist at HDFC bank, who had the same call as the wider poll median on inflation. “So there is a decline in inflation in October due to favourable base effects but not by as much as was anticipated and likely not below four per cent.”
