LPG price cut may bring down September inflation by upto 30 bps: Analysts
The cut in cooking gas prices by Rs 200 per cylinder, announced on Tuesday, may reduce retail inflation rate by 20 to 30 basis points (bps) in September.
According to analysts, this move will bring inflation below the central bank’s upper tolerance limit of 6 per cent.
An analysis by Citi Research noted that LPG has a direct weight of 1.29 per cent in the consumer price index (CPI) and could indirectly impact prepared meal prices with a lag.
“This could lower inflation by 30 bps, and along with tomato price reversal, it raises the possibility of a below 6 per cent print in September 2023.
