India Inflation Forecast Rises to 5.4% in September as Oil Costs Climb

India’s consumer-price inflation was forecast to reach 5.4% year over year in September, raising pressure on the Reserve Bank of India to keep monetary policy tight as energy and shipping costs increased.

The estimate would be the highest inflation reading of the year if realized, up from 4.82% in August. It would also mark the fourth consecutive month above the central bank’s 4% target, while remaining below its 6% upper tolerance limit.

Forecasts ranged from 4.9% to 5.9%. A separate 13-economist survey forecast September inflation at 5.6%, underscoring the uncertainty before the official consumer-price index release.

Higher energy and shipping costs added pressure. The average price India paid for imported crude increased from $116.09 a barrel in September to $120.06 in October as of the report date. Freight, insurance and tanker costs also rose, increasing the cost of transporting Middle Eastern oil to Indian refineries.

Core inflation, which excludes food and fuel, was estimated at 4.3% in September. India’s statistics agency does not officially publish a core-inflation measure.

“We are also beginning to see clearer evidence of energy prices spilling over into other parts of the CPI, rather than just transport,” said Dhiraj Nim, an economist at ANZ.

The September figure remains a forecast rather than an official reading. The official CPI result was not yet available.