Preview: Inflation likely hit 2012 high
Asia's third-largest economy grew at its slowest pace in nearly three years in the last quarter and on Tuesday the International Monetary Fund lowered its 2012 forecast to 4.9 per cent, putting pressure on the Reserve Bank of India to cut one of the highest interest rates among G-20 economies.
But the bank has cited stubbornly high inflation as a key risk to the economy.
According to the median forecast in the Reuters poll, the wholesale price index, the country's main inflation gauge, likely rose to 7.70 per cent in September from a year earlier, compared with 7.55 per cent in August and far above the central bank's comfort level of between 4-5 per cent.
It was last higher in December when it hit 7.74 per cent.
Forecasts ranged from 7.20 per cent to as high as 8.00 per cent, with 20 of 23 contributors predicting the September reading to be higher than the previous month.
Given the fact that we have had some correction in diesel prices, it is very natural that inflation would have moved higher, said Indranil Pan, chief economist at Kotak Mahindra Bank in Mumbai.
The government last month increased diesel prices and limited the supply of subsidised cooking gas. It also opened up the country's supermarket sector to
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