India inflation likely to ease

Dhaka,  Tue,  26 September 2017
Published : 12 May 2017, 14:37:29

India's April retail inflation seen easing to three-month low

India inflation likely to ease
India's consumer inflation is expected to have eased to a three-month low in April, helped by smaller rises in food prices.

Reserve Bank of India (RBI) is likely to keep interest rates mostly unchanged. The RBI has a mid-term inflation target of 4.0 per cent.

Its Monetary Policy Committee (MPC) maintained its hawkish stance on inflation, with most members expressing concern over upside risks to core inflation.

Consumer prices, the RBI's main policy target, likely rose 3.49 per cent in April, according to a poll of economists, compared with an increase of 3.81 per cent in March.

Data on the consumer price index, wholesale price index and industrial output will be released around 1200 GMT Friday.

Economists expect the central bank to keep its policy rate unchanged this year.

"RBI is not likely to cut interest rates at least for six months as inflationary pressures are building up," said NR Bhanumurthy, an economist at the National Institute of Public Finance and Policy.

Economists predict 1.5 per cent annual growth in industrial output in March, bouncing from February's 1.2 per cent contraction.

Wholesale price inflation is expected to have slowed last month to 4.79 per cent from 5.70 per cent in March, according to the poll.

In Asia, China's annual consumer inflation edged up to 1.2 per cent in April from March's 0.9 per cent, while quickening in Indonesia to a 13-month high of 4.17 per cent.

On Friday, India will release a new series of industrial output and wholesale inflation data, revising the base year to 2011/12 from 2004/05, according to Reuters.
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