India’s headline inflation seems to have eased in September

India’s headline CPI inflation for the month of September is expected to have slowed down slightly. According to a Societe Generale research note, the consumer price inflation is likely to have eased to 4.9 percent year-on-year in September from 5 percent year-on-year in August.

The expected lower inflation is possibly due to the ongoing easing of food prices, which are mostly because of much lower vegetable and fruit prices. The food prices have eased for the past couple of months following a major spike in the earlier months due to the heat wave that hurt the country.

Even if prices of protein continue to be high, this is mostly a reflection of the base effect given that a monthly drop in these prices is expected, noted Societe Generale. Moreover, prices of pulse are decelerating as increase in imports has begun making a dent in domestic prices.

“We believe that the next trigger for inflation will be the impact of the payment of salary arrears for government employees coupled with the forthcoming festival season”, added Societe Generale.