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Motilal Oswal: September Inflation Higher Due To Vegetables, IIP Decline In August Lower Than Expected

India’s retail inflation rose to an eight-month high of 7.3% in September 2020, mainly on account of a spike in vegetable prices.

A customer removes Indian rupee banknotes from a plastic bag at a stall in the Laxmanrao Yadav vegetable market in Mumbai (Photographer Dhiraj Singh/Bloomberg)
A customer removes Indian rupee banknotes from a plastic bag at a stall in the Laxmanrao Yadav vegetable market in Mumbai (Photographer Dhiraj Singh/Bloomberg)

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Motilal Oswal Report

The Consumer Price Index-based retail inflation has come in at an eight-month high of 7.3% YoY in September-20 (versus 6.7% in August-20 and 4% in September 2019).

The number was higher than our expectation of 6.4% and market consensus of 6.9%.

Higher food inflation was driven entirely by vegetable inflation as it shot up to 20.7% in September-20 from 11.5% a month ago.

Excluding vegetables, CPI inflation was flat at 6.3% YoY in September-20.

Overall, food inflation came in at 10.7% YoY in September-20 (versus 9% a month ago).

Additionally, core inflation remained unchanged for the third consecutive month at 5.4% YoY in September-20.

Click on the attachment to read the full report:

Motilal Oswal Ecoscope 131020.pdf

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