NEW DELHI: India’s consumer price index (CPI) inflation in October likely breached the upper bound of the Reserve Bank of India’s (RBI) tolerance range of 2-6% for the first time in two years, according to an FE poll of 11 economists.
Retail inflation, as per the poll, is seen rising to a 24-month high of 6.1% in October from 5.54% in September mainly because of a surge in food inflation while core inflation is also seen inching higher. CPI inflation was 0.04% in October 2025.
This would be the first time CPI inflation rises above 6% since October 2024. It would also mark the 12th consecutive month of the increase in retail inflation, and the fifth month in a row when inflation is higher than the RBI’s medium-term target of 4%.
Estimates in the poll ranged between 5.8% and 6.2%. The Ministry of Statistics and Programme Implementation will release CPI data for October on November 12.
Food inflation, which rose to 7.74% in September, is seen rising above 8% in October, economists said.
“While the base effect is supportive this month, positive price momentum will likely overwhelm it, pushing headline to a 24- month high,” said Gaurav Kapur, chief economist at IndusInd Bank. “Price pressures are broadening too with share of items in the CPI basket registering over 4% inflation increasing,” Kapur said.
Core inflation, which excludes fuel and food items, is estimated to have risen to a series high of 4.6% in October from 4.3% in September, as per the FE poll. The RBI projects core inflation to average 4.4% in the current financial year, while it sees headline inflation during FY27 at 5.2% with price increases seen hitting a peak of 6.0% in the October-December quarter.
“Sticky food inflation, pass-through of external price shocks, sustained public sector support, and robust consumer credit growth are likely to keep underlying price pressures firm,” said Tanay Dalal, economist at Axis Bank.
With inflation projected to stay around the upper end of the RBI’s tolerance range in the near future, economists expect the Monetary Policy Committee to continue raising interest rates this financial year.
The MPC raised the repo rate by 25 basis points in October to 5.50% and economists see another 50-75 basis points of rate hikes in this cycle.
October also marks the first clean comparison with the full-month impact of the goods and services tax (GST) rate reductions implemented in late September 2025, which were fully reflected in the October 2025 data.
“Refined core CPI contracted in seasonally adjusted month-on-month terms that month. Consequently, part of the expected increase in inflation this October should be viewed as a GST-induced base effect rather than renewed sequential price pressure,” said Dhiraj Nim, senior economist, ANZ Bank.
“Indeed, according to our estimates, the unadjusted month-on-month increase in the headline CPI index should be broadly in line with the average trend seen in recent years,” Nim said.
Source: The Financial Express
