India's inflation to inch up in September

The expected spike in India's inflation is due to the waning of the favourable base effect. The sub-4% print (lowest inflation recorded as per the new series) in the previous two months is more of an anomaly and is the result of a favourable base effect rather than a reflection of reality. 

"We expect India's headline CPI for September 2015 to print at around 4.40% yoy, higher than the August 2015 CPI print of 3.66% yoy", says Societe Generale.

A pick-up in September is expected and believe that momentum should persist going forward, especially given the potential impact of the weak monsoon on prices of pulses as well fruit and vegetables. Nevertheless, the headline inflation will remain well within the RBI's immediate target of 6% by January 2016, states Societe Generale.