Overview

• Wholesale inflation returned to growth at 0.52% in August after two months of deflation, led by higher prices for food products and manufactured goods, according to government data.
• Retail inflation ticked up to 2.07% from July’s eight-year low of 1.61% yet remained well below the Reserve Bank of India’s 4% target.
• Most forecasters expect the RBI to keep policy rates unchanged on October 1 despite room to ease, citing strong growth and a recent consumption boost.
• GST rationalisation taking effect on September 22 is expected to lower recorded inflation, though the impact hinges on how much of the tax cuts firms pass through to consumers.
• Analysts flagged mixed core signals with gold-driven increases contrasting broader easing, and they warned of upside risks from heavy rains, commodity swings and trade or tariff developments.