India's retail inflation, as measured by the Consumer Price Index (CPI), likely dropped to 5.4% in September, marking a three-month low and falling within the Reserve Bank of India's (RBI) target range of 2-6%. This decline is attributed to a significant 62% month-on-month drop in tomato prices, though onion prices increased.
Economists also anticipate the impact of the government's LPG cylinder price subsidy to reflect in the data. Core inflation, excluding food and fuel, is expected to remain around 4.8-4.9%. Additionally, industrial growth, as indicated by the Index of Industrial Production (IIP), is projected to reach 9.1%, the highest in 14 months, driven by increased output in electricity, mining, and auto production. The August IIP growth rate is likely to be the highest in 14 months.