India's wholesale and consumer price growth could top 12% and 6% in October

India Ratings and Research expects October's wholesale price index to climb past 12% and consumer price inflation to exceed 6%, citing a combination of adverse base effects, challenging weather conditions and rising energy costs. September's WPI rose to 11.39%, up from 9.92% in August, while retail inflation reached 5.54%, the highest in 23 months. The agency predicts that the base-effect pressure on wholesale prices will likely continue through February 2027, keeping inflation in double-digit territory.

It adds that a de-escalation of the West Asia crisis could lower the inflation trajectory. In response, the Reserve Bank of India may raise its policy rate by 50-75 basis points during the ongoing tightening cycle. The RBI recently lifted its benchmark rate by 25 basis points to 5.50%, its first increase since February 2023.