Thursday, October 28

India Retail Inflation Slows More-Than-Estimated in September


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(Bloomberg) — India’s consumer prices rose at the slowest pace in five months, supporting the case for the central bank to keep interest rates lower for longer to aid economic growth.

Consumer prices rose 4.35% in September from a year earlier compared to 5.3% in August, the Statistics Ministry said in a statement Tuesday. That’s slower than the median forecast for a 4.5% gain in a Bloomberg survey of 35 economists.

The September reading slows the pace of price-growth to Asia’s third-fastest from second, easing pressure on policy makers to choose between either combating inflation or supporting growth. One-year interest-rate swaps were at 4.07% on Tuesday, the highest since April 2020, reflecting the market’s expectations for the central bank to tighten policy amid a deluge of liquidity.

The central bank has, for now, kept the benchmark interest rate steady at a record low 4% as it seeks to support a nascent recovery in the economy. The monetary authority led by Governor Shaktikanta Das also cut the full-year inflation forecast to 5.3 % from 5.7%.

Risks remain in the form of a simmering energy crisis and rising commodity and input prices.

Data released separately on Tuesday showed industrial output rose 11.9% in August from a year earlier, signaling a steady economic recovery.

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