New Delhi: Retail inflation likely rose to a near six-year peak in January as food prices stayed high, according to a small majority of economists in a Reuters poll, which may persuade the Reserve Bank of India to keep interest rates on hold in the coming months.
The February 5-7 poll consensus of more than 40 economists showed India’s annual consumer price inflation is expected to have risen to 7.40 per cent in January, a touch above December’s 7.35 per cent and the highest since May 2014.
While nearly half of the economists polled predicted price pressures eased in January, none expected it to have fallen within the RBI’s medium-term target range of 2 per cent-6 per cent, suggesting a significant decline in inflation over the coming months was unlikely.
The RBI kept its repo rate unchanged at 5.15 per cent on Thursday, despite slowing growth, and revised up its inflation projections, estimating it would range between 5.0 per cent and 5.4 per cent in the first half of the upcoming fiscal year.
“Headline consumer price inflation is likely to have edged up in January, in large part due to a continued increase in food inflation,” said Darren Aw, Asia economist at Capital Economics.
