New Delhi, Sep 11 || The consumer price index (CPI) is likely to settle at 2 per cent in August, a Bank of Baroda (BOB) report said on Thursday, citing a projected decline in its Essential Commodity Index (ECI).
The public sector lender said that the BoB ECI has been in deflation territory for 4th consecutive month in a row, declining by -1 per cent, on a year-on-year (YoY) basis in August and by another -0.9 per cent in the first 9 days of September.
The major support had come from vegetables and pulses, supported by better production. In September, prices of tomato, onion and potato are showing a downward correction in prices, with pronounced correction visible for tomato, the bank stated.
Apart from this, global food and energy prices also remained in favour of a lower inflation rate.
"The current move of the government to lower GST rates on the majority of FMCG and durable goods, among others, is a sigh of relief for inflation. We assess the overall impact on CPI to be 55-75 basis points," the report highlighted.