Retail inflation in India is likely eased to 5.50 per cent last month on moderating food price rises and government subsidies that offset a surge in the cost of crude oil, a Reuters poll found. This is within the Reserve Bank of India’s (RBI) tolerance level. The central bank kept monetary policy unchanged on October 6 for a fourth consecutive meeting and signaled interest rates would remain high until inflation was closer to 4 per cent, the midpoint of the RBI’s 2-6 per cent target range. Rise in food prices, which make up about half the consumer price index (CPI), continue to cool from recent peaks after the government enacted a series of measures to boost supply. Inflation, as measured by the annual change in the CPI, was forecast to have fallen to 5.50 per cent in September from 6.83 per cent in August, according to an October 3-9 Reuters poll of 66 economists. Forecasts ranged between 5.10 per cent and 6.90 per cent, with over three-quarters of respondents predicting inflation to fall below the central bank’s upper end of the target range. “Vegetable prices have corrected very sharply and not just for tomatoes, but for a host of other vegetables as well.So more or less the vegetable price shock is receding,” said Dhiraj Nim, an economist at ANZ Research. “Having said that, the persistent part of the food inflation problem remains there, which is cereals, pulses and spices, and I think the RBI can’t do much about it anyway.” googletag.cmd.push(function() { googletag.display(“div-gpt-ad-6601185-5”); }); Rising crude oil prices are also likely to keep inflation elevated in the world’s third-largest oil importer. Oil prices rose around 3 per cent on Monday to trade around $90 a barrel. “Oil prices … are likely to remain high over the remainder of the year on global supply concerns,” said Alexandra Hermann at Oxford Economics. Inflation was predicted to remain above 4 per cent at least until the second quarter of 2025, averaging 5.5 per cent this fiscal year and 4.8 per cent next, a separate Reuters poll showed. Economists expect the RBI’s next move to be a cut in the second quarter of 2024.