Macroeconomic Forecast India

Price pressures started to dim in October, despite the continued rise in year-on-year measures. Wholesale price inflation - India's benchmark price reading - actually fell 0.5% m-o-m in the four weeks to October 17, despite the y-o-y figure hitting a six-month high of 1.6%. While base effects and some commodity price contagion are likely to see annual rates grind higher, there is unlikely to be sufficient pressures to force the Reserve Bank Of India to consider interest rate hikes until the New Year, in our view.

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