You are here: Home » Reuters » News
Business Standard

India inflation seen speeding up in January but still below target: Reuters poll

Reuters  |  BENGALURU 

By Paul

BENGALURU (Reuters) - Indian inflation reversed course and nudged up slightly in January but remained below the central bank's target for a sixth straight month, a poll predicted, supporting this week's unexpected move by policymakers to cut rates.

On Thursday, the of India caught financial markets off-guard by reducing its key policy rate by 25 basis points to boost growth and as inflation has remained benign.

While a change in monetary policy stance to "neutral" was the consensus in a separate poll taken ahead of the Feb 7 meeting, only around a third of respondents expected any easing.

The latest poll of 30 economists surveyed before Thursday's RBI meeting suggested consumer price inflation accelerated to 2.48 percent from a year ago, after slowing in December to its lowest rate since June 2017 at 2.19 percent.

"The disinflation from and fuel are probably going to start fading, we don't anticipate inflation to drag from these factors," said Vishnu Varathan, and strategy for at "We might see inflation normalizing back to their 3-4 percent range by the middle of this year."

and for nearly half of the overall basket and was negative (meaning prices fell?) in the previous four months.

Forecasts in the poll ranged from 2.00 percent to 2.80 percent. If the consensus is realised it would mark the sixth month in a row where inflation was below the RBI's medium-term target of 4 percent.

"Even though inflation is expected to inch up, the evolution is likely to remain benign amid muted demand side pressures. This should provide the central room for another cut," said Shashank Mendiratta, at

But the disparity between core inflation, which is running closer to 6 percent, and the headline figure remains wide and could weigh on the RBI's monetary policy path, said Prakash Sakpal, at ING, citing similar concerns expressed by the new

(Polling by Khushboo Mittal and Anisha Sheth; Editing by Shri Navaratnam)

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

First Published: Fri, February 08 2019. 08:39 IST
RECOMMENDED FOR YOU