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INDIA: Surging Food Prices Expected to Drive Headline Inflation Higher

INDIA

CPI data for October is on the docket at 10:30GMT/16:00 local time. The headline figure is expected to rise to +5.90% y/y from +5.49% in September, with the increase mainly driven by rising food prices. Industrial production data for October will also be crossing the wires.

  • Goldman Sachs expect headline CPI inflation to increase to 6.0% y/y in October. High frequency data showed a sharp sequential increase in vegetable prices in the first half of October, which has corrected since then and continued to trend lower into the first week of November. Overall, vegetable prices on average have seen a month-over-month sequential increase of 8.5% in October. Goldman Sachs expect core inflation to increase to 3.7% y/y, partly driven by higher gold and silver inflation.
  • JP Morgan say headline inflation is projected to rise to 6.0% y/y in October, driven by a continued surge in food prices that began last month. This increase in food inflation is primarily led by vegetables, but also includes significant increase in the prices of edible oils driven by a 20% import duty hike imposed by the government in mid-September. Additionally, core-core inflation is projected to inch up to 3.9% y/y from 3.8% in September, on higher gold prices.
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CPI data for October is on the docket at 10:30GMT/16:00 local time. The headline figure is expected to rise to +5.90% y/y from +5.49% in September, with the increase mainly driven by rising food prices. Industrial production data for October will also be crossing the wires.

  • Goldman Sachs expect headline CPI inflation to increase to 6.0% y/y in October. High frequency data showed a sharp sequential increase in vegetable prices in the first half of October, which has corrected since then and continued to trend lower into the first week of November. Overall, vegetable prices on average have seen a month-over-month sequential increase of 8.5% in October. Goldman Sachs expect core inflation to increase to 3.7% y/y, partly driven by higher gold and silver inflation.
  • JP Morgan say headline inflation is projected to rise to 6.0% y/y in October, driven by a continued surge in food prices that began last month. This increase in food inflation is primarily led by vegetables, but also includes significant increase in the prices of edible oils driven by a 20% import duty hike imposed by the government in mid-September. Additionally, core-core inflation is projected to inch up to 3.9% y/y from 3.8% in September, on higher gold prices.