The fight against inflation will be “dogged and prolonged” due to the long and variable delays associated with monetary policy, according to the Reserve Bank of India’s (RBI) October bulletin. However, headline inflation is forecast to decline from its September peak, based on waning momentum and favourable base effects, the report added.
“In India, broader economic activity has remained resilient and poised to expand further, with domestic demand accelerating as the contact-intensive sectors are experiencing a bounce-back. Robust credit growth and fortified corporate and bank balance sheets provide further strength to the economy.”
“Headline inflation is set to ease from its September high, albeit stubbornly, on the back of easing momentum and favourable base effects. These factors will entrench India’s prospects as one of the fastest growing economies of the world,” the central bank’s report stated.
In the bulletin, it was clearly mentioned that the report was created by a team led by RBI Deputy Governor Michael Debabrata Patra, and that the opinions represented in the report do not reflect those of the RBI.
In September 2022, food inflation climbed 8.60% compared to 7.61% in August, causing India’s retail inflation to reach a record high of 7.40%. in the month.
“Data released by the National Statistical Office (NSO) on October 12, 2022, showed that inflation, measured by year-on-year (y-o-y) changes in all India consumer price index (CPI), increased to 7.4 percent in September, up from 7.0 percent in August.”
“Headline inflation was mainly pushed up by the sharp increase in CPI food inflation to 8.4 percent in September from 7.6 percent a month ago,” the report said.