India: Inflation pressures point to tighter bias – DBS
DBS Group Research expects India’s inflation to accelerate to 4.9% year-on-year, with food and energy costs driving a gradual broadening of price pressures.
India's inflation is expected to increase to 4.9% year-on-year, with food and energy costs contributing to a gradual broadening of price pressures, according to DBS Group Research. Chief Economist Taimur Baig and strategist Chang Wei Liang anticipate inflation to remain above 5% in the second half of the fiscal year, highlighting a tightening policy bias.
The goods trade deficit is anticipated to stay around $30 billion, as export growth is offset by a widening energy import bill. India's inflation is projected to quicken to 4.9% year-on-year from the previous month's 4.4%. Energy prices have been volatile, exerting input cost pressures that may gradually impact consumers, despite retail fuel prices remaining unchanged since May.
Following two years of normal monsoon, the country's cumulative southwest rainfall this year is currently 15% below the long-term average, while reservoir levels are also declining, potentially affecting upcoming rabi crops.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
