Highlights:
- CPI inflation eased to a 4-month low of 4.9% in October.
- Moderation was supported by deflation in fuel and light category and a supportive base.
- Food inflation was largely unchanged with sticky double-digit inflation for cereals, pulses and spices.
- Core inflation edged lower to 4.4% from 4.6% a month ago.
- We have revised our FY24 CPI projection to 5.4% from 5.6% earlier.
- Weak Kharif harvest outlook and expected hit to Rabi sowing are major threats to the declining inflationary trend.
- With risks tilted to the upside, the RBI is expected to maintain hawkish policy tone in the upcoming monetary policy meeting.
