India’s retail inflation likely accelerated last month towards the upper limit of the RBI’s target range as fruit and vegetable prices rose, a Reuters poll found.
The Reserve Bank of India left interest rates on hold on Wednesday but the central bank said price pressures may persist in the near-term.
The December 6-8 poll of 39 economists forecast November consumer price inflation at 5.1%, faster than October’s 4.48%. If realised, it would be within the RBI’s target band of 2-6% for a fifth consecutive month. The CPI data is due on December 13.
“Last month’s reduction in fuel taxes and a slightly favourable statistical base were offset by strong momentum in the prices of perishables,” said Yuvika Singhal, economist at QuantEco Research.
That was pushed further “because of untimely rains and the uptick in LPG (liquefied petroleum gas) and kerosene prices”, she added.
Brent crude oil, India’s biggest import, slid more than 16% last month.
High inflation last year has kept this year’s price gains compared with a year earlier subdued. But that is expected to wane as prices are set to rise for mobile phone bills and clothes, putting inflation back on a rising trend.
“The upcoming impact from the hike in telecom tariffs, volatility in the price of perishable goods and any plausible supply-chain disruptions from COVID’s latest variant could negate the recent respite we had in fuel and global commodity prices,” said Madhavi Arora, lead economist at Emkay GlobalFinancial Services.