India CPI Inflation climbed up to an 8-month high of 7.34%YoY in Sep-20 compared to 6.69% in Aug-20, marking the sixth consecutive month of retail inflation remaining above RBI’s upper threshold of tolerance i.e. at 6.0%. Price pressures in the month were largely a function of food prices, with vegetables along with non-alcoholic beverages, oils & fats and protein rich items (such as pulses, eggs, fish & meat) driving the upside. Looking ahead, to borrow from Mark Carney (IIF, Tokyo Jun-19), we segregate likely near-term CPI inflation drivers into – Pull, Push and the Pipe factors.
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