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Expert Views: Consumer inflation eases in March

Reuters  |  MUMBAI/BENGALURU 

MUMBAI/BENGALURU (Reuters) - India's annual consumer price eased to 4.28 percent in March, data from the showed on Thursday.

Analysts polled by had forecast March's consumer price to ease to 4.20 percent from 4.44 percent in the previous month.

A PRASANNA, AT ICICI SECURITIES PRIMARY DEALERSHIP, MUMBAI

"March CPI was slightly higher than our estimate due to upside surprises in both and non-

In the current quarter, is expected to go up due to base effects and seasonal rise in prices. in the fourth quarter of FY19 is tracking around 4.5 percent, but the proposed summer crop support price hike could pose a large upside risk to H2 Accoridngly, we continue to expect to hike the repo rate by 25 bps in August."

TIRTHANKAR PATNAIK, STRATEGIST, MIZUHO BANK, MUMBAI

"Clearly, summer rainfall is one of the risks to inflation, which will weigh on If the predictions of summer rainfall are below average, then that might have an upward pressure on Secondly, the government's announcement on MSP (minimum support price) might also have an upward bearing on CPI

"The third risk is the continuous rise in The rise in fuel rates did not commensurate with the increase in If fuel rises further, it might also have an impact on overall

"The numbers are in line with RBI's expectations. Nowhere do we see significant flare-ups. From that perspective, should not take anything incremental in terms of interest rates from the March numbers."

GARIMA KAPOOR, ECONOMIST AND VICE-PRESIDENT, ELARA CAPITAL, MUMBAI

"We expect to revise its FY19 rate projection upwards. We expect CPI to overshoot RBI's forecast to average 4.7-4.8 percent in FY19 compared with 4.5 percent in FY18.

"While today's CPI print of 4.28 percent came in well within RBI's projected rate of 4.5 percent, the risk to going forward lies on the upside. As such, we expect to respond with a rate hike during the third quarter of FY19. A generalized increase in prices amid pick-up in rural economic activity could add to upside risks to core going forward.

"Core has been steadily inching up over last four months. It rose from 4.54 percent in October 2017 to 5.37 percent in March this year. In particular, items within miscellaneous index such as education and have already been inching up."

ANIS CHAKRAVARTY, LEAD ECONOMIST AND PARTNER, INDIA, MUMBAI

"The outlook on continues to remain data-dependent, but risks remain largely to the upside, especially from expectations of a rise in due to international output cuts, further hardening of domestic consumption, and continued impact of HRA (house rent allowance) increase.

"We expect that expectations in the period ahead will possibly be shaped by oil price movement, impact of minimum support prices inclusion, fiscal slippage as GST collections remain low, and monsoon forecasts. A greater challenge would be for the to set policy sentiments correctly in the coming period as higher yields, inflationary pressures and election cycle in and US both are likely to lead to market volatility. We expect prints to hover around the 5-percent mark in FY18-19."

RUPA REGE NITSURE, GROUP CHIEF ECONOMIST, L&T FINANCE HOLDINGS, MUMBAI

"Continuation of higher industrial growth driven by lower statistical base and relatively benign CPI at 4.3 percent, driven by moderate inflation, vindicates RBI's stance to hold rates and keep the policy in neutral zone. Going ahead, growth and are going to give increasingly lower prints."

(Reporting by in Mumbai, Krishna V Kurup and Vishal Sridhar in Bengaluru, additional reporting by in New Delhi, Editing by Sherry Jacob-Phillips)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, April 12 2018. 18:25 IST
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