According to DBS Group Research, India's March Consumer Price Index (CPI) inflation is expected to increase from 3.2% to 3.45% year over year due to rising input, energy, and cooking gas costs, while retail gasoline and food prices remain relatively stable. Price pressure is lessened by the correction of precious metals. The bank forecasts core inflation staying below 4%, which supports the RBI's ongoing neutral stance, but it anticipates that increased energy prices will eventually become apparent.
mild increase in CPI with a muted core
"March inflation is predicted to inch up to 3.45% yoy, from 3.2% month before, with the headline likely to partially reflect increase in cooking gas, energy index, and ex-factory input prices, while retail fuel and food costs were benign."
"Precious metals corrected throughout the month, which probably slowed the speed of rise in the sub-component."
"As alternative supplies arrive with a lag, we anticipate the impact of rising energy prices to gradually percolate in the following months."
In the meantime, "core inflation is anticipated to stay below 4%, decreasing the need for the central bank to assume a hawkish position in the near future (RBI: Neutral pause)."
mild increase in CPI with a muted core
"March inflation is predicted to inch up to 3.45% yoy, from 3.2% month before, with the headline likely to partially reflect increase in cooking gas, energy index, and ex-factory input prices, while retail fuel and food costs were benign."
"Precious metals corrected throughout the month, which probably slowed the speed of rise in the sub-component."
"As alternative supplies arrive with a lag, we anticipate the impact of rising energy prices to gradually percolate in the following months."
In the meantime, "core inflation is anticipated to stay below 4%, decreasing the need for the central bank to assume a hawkish position in the near future (RBI: Neutral pause)."
