(Reuters) – India’s annual retail inflation rate eased to 6.44% in February from 6.52% in January, government data showed on Monday.
However, the CPI (consumer price index) data was above the Reserve Bank of India’s (RBI) upper targeted limit of 6% and higher than economists’ average estimate of 6.35% estimate, according to a Reuters poll.
COMMENTARY:
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
“The February CPI print came broadly in line with our expectations but higher than the MPC’s (Monetary Policy Committee) upper threshold levels of 6% for two consecutive months.
“While the global financial instability has reduced the probability of a 50 basis points (bps) hike by the U.S. Federal Reserve and the Indian rupee has remained largely well behaved, we expect the higher-than-6% inflation to keep the MPC cautious and hike the repo rate by 25 bps in the upcoming April policy.”
SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM
“Inflation came in higher than expected, led by higher food inflation — particularly cereals and milk inflation. The risk to inflation is tilted towards the upside with El-Nino conditions predicted in 2023. The still sticky core provides little leg room for absorbing any spikes in food inflation that might develop in the coming months.
“Rabi sowing has also been tepid compared to last year. Overall inflation prints could edge below 6% over the next quarter on account of base effects, but they are likely to jump back above 6% in the July-September quarter if the above risks materialise.
“This print strengthens the case for another 25 bps rate hike by the RBI in the next policy with an increasing possibility that further rate hikes post April cannot be ruled out now.”
(Reporting by Nallur Sethuraman and Nishit Navin in Bengaluru; Editing by Sohini Goswami)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.