INSUBCONTINENT EXCLUSIVE:
The price of oil surged over 7.5 per centlast month and is forecast to get costlierThe country's retail inflation probably eased again in
September, falling to a five-month low, thanks to a favourable comparison with last year and moderating food prices that offset a surge in
the cost of crude oil and fuel, a Reuters poll found.The median from an Oct
5-7 poll of 37 economists predicted consumer price inflation fell sharply to 4.5 per cent in September from 5.3 per cent in August
That would mark the third consecutive month within the Reserve Bank of India's (RBI) tolerance band of 2 per cent-6 per centForecasts for
the data, scheduled for release on Oct
12 at 1200 GMT, ranged between 4.25 per cent and 5.50 per cent, with only a handful of predictions above five per cent.An easing in price
pressures would provide policy room to the RBI, widely expected to hold the key repo rate at four per cent at the conclusion of its
monetary policy meeting on Friday, as it focuses on bolstering economic growth."Despite elevated fuel and core inflation, lower than earlier
expected food momentum and a high base from last year likely kept headline prints in check
Inflation prints are likely to bring in some positive surprise over the coming months," said Sakshi Gupta, senior economist at HDFC Bank.But
price pressures were expected to resume as the economy picks up."From December, once the base effect drops off and purchasing power in the
system improves, CPI inflation will rise above five per cent again," said HDFC's Gupta, adding the base effect alone likely took a full
percentage point off September inflation.However, economists noted that food inflation, which usually is a driver of overall inflation at
this time of year, was more tame."Prices of vegetables have not witnessed the usual seasonal increase this monsoon season, which is largely
responsible for benign food inflation apart from a high base," said Teresa John, an economist at Nirmal Bang."However, prices of pulses,
oils - fats and sugar have all risen on a sequential basis."Economists widely expect the RBI to lower its inflation estimates, but Brent
crude oil has been hitting multi-year highs.The price of oil surged over 7.5 per cent last month and is forecast to get costlier as fuel
demand recovers.The latest Reuters poll also forecast that India's industrial output rose 12 per cent in August compared with 11.5 per
