India's consumer price inflation is likely to have eased to 4.80% in April, just shy of March's rate as food inflation remains sticky, according to economists polled by Reuters.
While headline inflation has moderated in recent months, food prices, which account for nearly half the consumer price index (CPI) basket, have remained elevated, squeezing household budgets.
With parts of the country experiencing a heatwave, food prices continue to pose an additional risk to India's inflation trajectory, according to the latest Reserve Bank of India bulletin.
The May 3-8 Reuters poll of 44 economists showed consumer price inflation (INCPIY=ECI) likely slipped to 4.80% in April, versus 4.85% in March.
Forecasts ranged between 4.50% and 5.10%, with a third of respondents predicting inflation to be above the March reading.
"Food inflation is sticky, and it is still around 8%... it is difficult for food inflation to come down further and headline inflation is not going to fall in a hurry," said Suman Chowdhury, chief economist at Acuite Ratings.
"There is no new kind of driver to lower inflation right now. We believe inflation will remain at around 5% or even go higher in the next few months."
Inflation was expected to return to the RBI's 4% medium-term target next quarter, the same quarter the central bank is expected to deliver an interest rate cut, a separate Reuters survey showed.
However, India's robust economic growth rate, at 8.4% in the October-December quarter, and expectations the U.S. Federal Reserve will delay its first rate cut were likely to push the RBI to ease monetary policy at a later date.
"We believe monetary policy has little to no influence on inflation especially when supply constraints drive food inflation," said Kunal Kundu, India economist at Societe Generale.
"With India's growth unusually high and given the central bank's focus on headline inflation... we expect the bank to announce its first rate cut move during Q4 2024, although we do not rule out the possibility of the decision being pushed further back into 2025."
Core inflation, which strips out volatile food and energy prices, was 3.18% in April, according to the median forecast of 22 economists. Official core inflation figures are not published.
