By Manoj Kumar
NEW DELHI (Reuters) - India's annual retail and wholesale inflation accelerated in April, mainly due to higher fuel and food prices, and in response some economists changed their views to expect a more hawkish central bank at its next policy meeting next month.
But with a faster-than-expected pace of retail and wholesale inflation, some economists have changed their mind about the RBI's next policy move.
India's annual retail inflation accelerated in April to 4.58 percent, after easing for three straight months, government data showed on Monday, mainly driven by faster increases in food and fuel prices.
Core inflation, mainly reflecting firming up manufacturing prices touched 5.9 percent, at a 44-month high, economists estimated.
April was the sixth straight month in which inflation was higher than the RBI's medium-term target of 4 percent.
India's wholesale price inflation in April rose faster than expected, to 3.18 percent, separate data released by the Ministry of Commerce and Industry on Monday showed.
Analysts worry that retail inflation could cross 5 percent mark in the next two to three months.
The biggest risk that Asia's third-largest economy faces is rising crude oil prices, which hit $78 a barrel last week, their highest since November 2014 following prospects of new U.S. sanctions on Iran.
An increase in oil price of $10 a barrel could quicken inflation by about 1 percentage point and reduce economic growth by 0.2 to 0.3 percentage points, a senior finance ministry official told Reuters, before the release of the Monday's data.
The International Monetary Fund, however, expects India's economic growth could rebound to 7.4 percent in fiscal year 2018/19 beginning April, from an estimated 6.6 percent in the previous fiscal year.
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