The year-on-year (YoY) headline inflation for September 2023 is anticipated to reach 31.1%, marking an increase from the previous month of August 2023, which recorded a YoY inflation rate of 27.4%. Comparing this to September 2022, there has been a significant inflationary surge, with a YoY rate of 23.2% during that period. Consequently, the average Consumer Price Index (CPI) for the first quarter of fiscal year 2024 (1QFY24) is expected to be approximately 28.9% YoY, contrasting with the 25.1% YoY rate observed in the same period the previous year. In September 2023, the average core inflation is projected to reach 22.4% on a YoY basis, surpassing the rate of 21.2% recorded in the previous month.

In September 2023, persistent monthly inflationary pressures are anticipated, with an expected 1.6% to 1.7% month-on-month (MoM) increase. The transportation index is poised to significantly contribute to this trend, expected to rise by 9.2% MoM and 31.4% YoY, primarily driven by an approximately 11% MoM increase in average petrol and diesel prices. Additionally, food inflation is projected to remain elevated, driven by higher prices for items like onions, fresh vegetables, sugar, gur, and pulses based on the SPI data. Consequently, food inflation is expected to increase by 1.4% MoM, resulting in a YoY jump in the food index to 32.8%.

Key factors posing risks to overall inflation include sustained continued rise in food and energy prices, as well as an imminent adjustment in gas tariffs.

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