Opinion poll – India Consumer price inflation rate expected to decline slightly in February
Written by Milony Purohit
Bengaluru, March 7 (Reuters) – Consumer price inflation in India is expected to fall to a four-month low of just over 5% in February as food price rises subside, according to a Reuters poll of economists.
Despite price pressures easing in the past few months, inflation in Asia’s third-biggest economy has been below 4% since September 2019, the midpoint of the central bank’s inflation tolerance range of 2-6%. The situation continues to be above.
Rising food prices, which account for nearly half of the Consumer Price Index (CPI) basket and are often subject to sharp fluctuations due to uneven monsoons, have recently outpaced overall inflation.
A Reuters poll of 42 economists conducted March 4-7 predicts consumer price inflation. INCPIY=ECI February’s year-on-year comparison fell to 5.02%, but it was only slightly lower than January’s 5.10%.
“Naturally, we expect food inflation to be the main driver of the headline inflation decline,” said Kunal Kundu, an economist at Société Générale. He added that this was likely the result of a significant drop in potato prices. Shopping basket.
The majority of economists expected inflation to be lower than in January., Just over a third said inflation had increased or remained the same.
“We expect CPI inflation to rise slightly in February to 5.3%, with food and core prices continuing to rise modestly,” India’s chief economist Rahul Bajoria said. “Pressures have largely been subdued and food prices are gradually falling.” Barclays.
“This will mean that the RBI will be on the sidelines for a long time as there will be no need to rush to cut rates given the robust growth.”
Inflation is not expected to return to the RBI’s interim target until at least 2026, as upside risks to food inflation remain, according to a recent Reuters poll on the long-term outlook.
A recent opinion poll also found that the central bank is expected to keep its key policy rate unchanged at 6.50% until at least mid-year, given that upside risks to inflation remain.
Aditi Raman, associate economist at Moody’s Analytics, said: “The government has emphasized its desire to reduce the budget deficit, and plans to cut subsidies across food, fuel and fertilizer by 7.8% in April. ” he said.
“Given the heavy weight of food and fuel in India’s consumer price index, headline inflation is likely to rise in the coming months.”
The survey also estimated that India’s core inflation rate (excluding volatile food and energy prices) is likely to be 3.50% in February, according to the median forecast of 26 economists. . The Indian government does not publish core inflation rates.
(Reporting by Milounee Purohit; Voting by Anant Chandak, Susobhan Sarkar; Editing by Ross Finley, Elaine Hardcastle)
((Milounee.Purohit@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Written by Milony Purohit
Bengaluru, March 7 (Reuters) – Consumer price inflation in India is expected to fall to a four-month low of just over 5% in February as food price rises subside, according to a Reuters poll of economists.
Despite price pressures easing in the past few months, inflation in Asia’s third-biggest economy has been below 4% since September 2019, the midpoint of the central bank’s inflation tolerance range of 2-6%. The situation continues to be above.
Rising food prices, which account for nearly half of the Consumer Price Index (CPI) basket and are often subject to sharp fluctuations due to uneven monsoons, have recently outpaced overall inflation.
A Reuters poll of 42 economists conducted March 4-7 predicts consumer price inflation. INCPIY=ECI February’s year-on-year comparison fell to 5.02%, but it was only slightly lower than January’s 5.10%.
“Naturally, we expect food inflation to be the main driver of the headline inflation decline,” said Kunal Kundu, an economist at Société Générale. He added that this was likely the result of a significant drop in potato prices. Shopping basket.
The majority of economists expected inflation to be lower than in January., Just over a third said inflation had increased or remained the same.
“We expect CPI inflation to rise slightly in February to 5.3%, with food and core prices continuing to rise modestly,” India’s chief economist Rahul Bajoria said. “Pressures have largely been subdued and food prices are gradually falling.” Barclays.
“This will mean that the RBI will be on the sidelines for a long time as there will be no need to rush to cut rates given the robust growth.”
Inflation is not expected to return to the RBI’s interim target until at least 2026, as upside risks to food inflation remain, according to a recent Reuters poll on the long-term outlook.
A recent opinion poll also found that the central bank is expected to keep its key policy rate unchanged at 6.50% until at least mid-year, given that upside risks to inflation remain.
Aditi Raman, associate economist at Moody’s Analytics, said: “The government has emphasized its desire to reduce the budget deficit, and plans to cut subsidies across food, fuel and fertilizer by 7.8% in April. ” he said.
“Given the heavy weight of food and fuel in India’s consumer price index, headline inflation is likely to rise in the coming months.”
The survey also estimated that India’s core inflation rate (excluding volatile food and energy prices) is likely to be 3.50% in February, according to the median forecast of 26 economists. . The Indian government does not publish core inflation rates.
(Reporting by Milounee Purohit; Voting by Anant Chandak, Susobhan Sarkar; Editing by Ross Finley, Elaine Hardcastle)
((Milounee.Purohit@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
https://www.nasdaq.com/articles/poll-india-feb-consumer-price-inflation-forecast-to-edge-lower Opinion poll – India Consumer price inflation rate expected to decline slightly in February