Fuel price hike just the start, more to come: Systematix report

A recent report by Systematix, a prominent Indian financial services group, warns that India's economy faces significant inflationary pressures, projecting that a recent Rs 3 fuel price hike is merely the first in a series. The report specifically forecasts that Wholesale Price Index (WPI) inflation could surge past 10%, with consumer retail prices inevitably following suit. This inflationary surge poses a dual threat: it risks significantly stifling India's economic growth by eroding purchasing power and increasing business costs, simultaneously complicating the Reserve Bank of India's (RBI) critical efforts to manage monetary policy. The central bank faces a difficult balancing act, needing to curb inflation without inadvertently triggering a deeper economic slowdown, especially as global crude oil prices remain volatile and contribute to domestic fuel costs.