Consumer Price Inflation Reduced In September Due To Decrease In Crude Oil Prices: Reuters Poll

India’s consumer price inflation (CPI) probably eased for a second straight month in September helped by lower food and fuel costs, a Reuters poll found.

As per a poll of 28 economists, CPI in September was predicted to have increased by 7.2% as compared to 7.8% in August. “A fall in vegetable prices in the month is the main reason we expect a fall in CPI,” said Aman Mohunta, economist at Nomura. The CPI data will be released today in the evening.

The Reserve Bank of India (RBI) has set a target of reducing inflation to 8% by January 2015 and 6% by January 2016.

“The RBI has done a fairly good job in bringing down inflation expectations, even so 6% by 2016 looks a bit ambitious,” said Shilan Shah, senior economist at Capital Economics in London. “Any negative effect on local food production and food prices is the biggest risk...it’s the one that’s always there” he added.

The poll also forecast the wholesale price inflation (WPI) to come down to 3.3% from last month’s 3.7%, owing to a decrease in global crude oil prices. The WPI data will be released tomorrow (Tuesday).