Feb inflation at 6.4%: Mint poll
1 min read . Updated: 10 Mar 2023, 11:26 PM IST
PremiumA majority of economists polled expect the central bank to raise interest rates again at its April policy meeting.
New Delhi: Retail inflation in India likely eased marginally in February due to a slight moderation in food prices, but remained elevated at 6.4%, a Mint poll of 19 economists showed. Inflation had risen to a surprising 6.5% in January.
The February inflation figure will be released on Monday. Except for one economist, who predicted 5.89%, all others said they expected inflation to cross 6%, with the highest projection at 6.62%. Madan Sabnavis, chief economist at Bank of Baroda, said lower onion and potato prices would likely lead a moderation in vegetable prices, but cereal prices would continue to be a pain point.
The expected high inflation print in February would mean that March quarter inflation could overshoot the monetary policy committee’s forecast “by a large margin," noted Aditi Nayar, chief economist at Icra. This implies a high likelihood of an interest rate hike in April, she added. RBI’s MPC has projected inflation to average 5.7% in the ongoing quarter, but if inflation indeed was 6.4% in February, it will need to fall drastically to 4.2% in March to meet the MPC’s forecast for the quarter.
A majority of economists polled expect the central bank to raise interest rates again at its April policy meeting. “The overshoot of inflation for two straight months, combined with a hawkish set of minutes from the last MPC meeting suggests that the balance of risks is tilted towards another hike at the April meeting," said Rahul Bajoria, economist at Barclays in a report dated 3 March.
However, most economists expect that this will be the last inflation print above 6%, and that inflation will average lower in the coming months.