INSUBCONTINENT EXCLUSIVE:
Retail Inflation at 5.30%, if realised, would hold RBI's two-six or cent range for the sixth monthThe country's retail inflation likely
rose last month after a three-month low in April, lifted by higher food and energy prices, but stayed within the Reserve Bank of India's
target range for the sixth consecutive month, a Reuters poll found
"In April, the retail prices of petroleum products were kept unchanged because of multiple state elections being held then, despite rising
crude prices," said Kunal Kundu, India economist at Societe Generale."But immediately thereafter, the retail prices were increased about
seven times in May itself, which led to substantial shooting up of this inflation component." The June 4-9 poll of 40 economists showed
While there were fewer supply chain disruptions during the recent pandemic lockdowns compared with last year, a general rise in inflation
globally has elevated domestic price pressures."Higher international prices for commodities including crude, edible oils and gold are
clearly spilling over into consumer inflation," said Abhishek Upadhyay, senior economist at ICICI Securities PD.Inflation was forecast to
That was similar to the RBI's estimated average of 5.1 per cent, at its June meeting
Inflation holding within the target range will likely help the RBI to focus its policies more towards the economy, which has taken a hit
For this fiscal year, predictions for growth have been repeatedly downgraded by economists and major institutions in recent weeks."Concerns
of pent-up demand coming in like last year are very curtailed because people have spent a large amount of their savings on health expenses,"
said Yuvika Singhal, economist at QuantEco Research
"Savings in the economy are depleted and ..
people would want to hold on to certain amount of liquidity."While that suggests demand would be subdued, rising input costs were likely to
pressure some components of the inflation basket higher
"Upside risks emerge from generalised increase in input prices ..
starting to feed progressively into final prices charged to consumers," added ICICI's Upadhyay.The poll also showed industrial output
The country's infrastructure output - which comprises of eight main industries and accounts for about 40 per cent of the total factories'
production - rose 56.1 per cent in April.
