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Business Standard
2 days ago
- Business
- Business Standard
India May inflation likely cooled to 3% as food price pressure eases: Poll
India's consumer inflation rate likely eased to a more than six-year low of 3 per cent in May thanks to a favourable base and a further moderation in food prices, a Reuters poll forecast, supporting last week's larger-than-expected interest rate cut. On Friday the Reserve Bank of India (RBI) stunned financial markets by slashing its key policy rate by 50 basis points, double what was predicted, to boost economic growth as inflation has remained subdued. The central bank, which targets inflation in the middle of its 2-6 per cent range in the medium term, also shifted its policy stance to 'neutral' from 'accommodative'. A snap Reuters poll after the decision found the RBI was likely done with cutting rates, wrapping up one of its shortest and shallowest easing cycles in more than a decade. The June 5-9 Reuters poll of 50 economists, published on Monday, forecast inflation measured by the annual change in the consumer price index (CPI) fell even further to 3.00 per cent in May from 3.16 per cent in April. That would mark the fourth consecutive month below the RBI's 4.0 per cent medium-term target, the longest such streak in nearly six years. It would also be the lowest inflation rate since April 2019, welcome news for many Indian households where food takes up a significant share of monthly expenses. Forecasts for the data due on Thursday at 1030 GMT ranged from 2.7 per cent to 3.7 per cent. "We are expecting a cooling of inflation to 3 per cent on a combination of a favourable base effect and... sequential moderation in prices of cereals and pulses even as most other segments started to strengthen," said Kanika Pasricha, chief economic advisor at Union Bank of India. "Prices of most food segments though continue to slide but the pace of correction is losing ground," she added. While concerns over widespread heatwaves raised fears of an inflation spike last month, a healthy harvest and the early arrival of monsoon rains helped ease those risks. "Even though there were heatwaves, I think the early monsoons across the country are likely to have cooled things off... most of the categories of food inflation seem to be contained," said Indranil Pan, chief economist at Yes Bank. Core inflation, which strips out volatile food and energy items and is seen as a better indicator of domestic demand, was expected to have edged up to 4.20 per cent year-on-year in May, from an estimated 4.00 per cent-4.10 per cent in April, the poll showed. India's official statistics agency does not publish core inflation data. Wholesale price index (WPI)-based inflation likely dipped to a 14-month low of 0.80 per cent in May from 0.85 per cent in April, the survey found. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Yahoo
3 days ago
- Business
- Yahoo
India May inflation likely cooled to 3% as food price pressure eases
By Pranoy Krishna BENGALURU (Reuters) -India's consumer inflation rate likely eased to a more than six-year low of 3% in May thanks to a favourable base and a further moderation in food prices, a Reuters poll forecast, supporting last week's larger-than-expected interest rate cut. On Friday the Reserve Bank of India (RBI) stunned financial markets by slashing its key policy rate by 50 basis points, double what was predicted, to boost economic growth as inflation has remained subdued. The central bank, which targets inflation in the middle of its 2-6% range in the medium term, also shifted its policy stance to 'neutral' from 'accommodative'. A snap Reuters poll after the decision found the RBI was likely done with cutting rates, wrapping up one of its shortest and shallowest easing cycles in more than a decade. The June 5–9 Reuters poll of 50 economists, published on Monday, forecast inflation measured by the annual change in the consumer price index (CPI) fell even further to 3.00% in May from 3.16% in April. That would mark the fourth consecutive month below the RBI's 4.0% medium-term target, the longest such streak in nearly six years. It would also be the lowest inflation rate since April 2019, welcome news for many Indian households where food takes up a significant share of monthly expenses. Forecasts for the data due on Thursday at 1030 GMT ranged from 2.7% to 3.7%. "We are expecting a cooling of inflation to 3% on a combination of a favourable base effect and... sequential moderation in prices of cereals and pulses even as most other segments started to strengthen," said Kanika Pasricha, chief economic advisor at Union Bank of India. "Prices of most food segments though continue to slide but the pace of correction is losing ground," she added. While concerns over widespread heatwaves raised fears of an inflation spike last month, a healthy harvest and the early arrival of monsoon rains helped ease those risks. "Even though there were heatwaves, I think the early monsoons across the country are likely to have cooled things off... most of the categories of food inflation seem to be contained," said Indranil Pan, chief economist at Yes Bank. Core inflation, which strips out volatile food and energy items and is seen as a better indicator of domestic demand, was expected to have edged up to 4.20% year-on-year in May, from an estimated 4.00%-4.10% in April, the poll showed. India's official statistics agency does not publish core inflation data. Wholesale price index (WPI)-based inflation likely dipped to a 14-month low of 0.80% in May from 0.85% in April, the survey found. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
23-05-2025
- Business
- Reuters
India cenbank to transfer record surplus of 2.69 trln rupees to government for FY25
MUMBAI, May 23 (Reuters) - The Reserve Bank of India's board approved the transfer of 2.69 trillion rupees ($31.53 billion) as surplus to the federal government for the fiscal year ended March as it opted to raise its contingency risk buffer under a revised economic capital framework, it said on Friday. The government had budgeted a dividend of 2.56 trillion rupees from the Reserve Bank of India, state-run banks and other financial institutions, according to budget estimates for the fiscal year 2025/26 in February. Analysts' estimates however, had ranged between 2.7 trillion rupees and 4 trillion rupees. In fiscal year 2024, the RBI had transferred a surplus of 2.11 trillion rupees. The lower-than-expected transfer follows a change in the range of contingency risk buffer that the central bank can maintain to 6% +/-1.5%. The buffer was to be maintained between 5.5% to 6.5% previously. "We believe that the revision in ECF with hike in buffers to 6% +/-1.5% is very prudent during times of global and domestic economic uncertainty," said Kanika Pasricha, chief economic adviser, Union Bank of India. "With the number higher versus budgeted ... the RBI has managed to provide fiscal leeway to the central government." For fiscal 2025, the RBI's board has decided to raise the contingency risk buffer to 7.5% from 6.5% in the preceding year, it said. The range of risk buffers was widened with the objective of providing adequate flexibility to the central bank, keeping in mind the prevailing macroeconomic and other factors, while also smoothening the transfer of surplus to the government, the RBI said in a release post an internal review of the framework. "The review highlighted that the transfer of surplus to the government has not been as stable as was desirable," it said. "Besides, certain risk sources that were not included in the current framework as they were not significant, have now gained in importance and merit inclusion," it added. ($1 = 85.3130 Indian rupees)
Reuters
10-02-2025
- Business
- Reuters
India inflation likely fell to 4.60% in January as food price rises moderated: Reuters poll
Summary Data due at 1030 GMT, Feb. 12 BENGALURU, Feb 10 (Reuters) - India's consumer inflation likely fell sharply to a five-month low of 4.60% in January from 5.22% in December on slowing food price rises, according to economists polled by Reuters. Such a fall would be a relief for most Indian households, who spend a significant amount of their budgets on food. A sharp decline in inflation will also be welcomed by the Reserve Bank of India, which cut the repo rate by 25 basis points to 6.25% late last week. Fresh winter produce reaching local markets has moderated food price rises, which make up about half of the consumer price index (CPI) basket. Within food items, cooling vegetable prices probably contributed the most, economists said. Inflation as measured by the annual change in the CPI, dropped to 4.60% last month, according to the median estimate in a February 4-10 Reuters survey of 56 economists. Forecasts for the data, due on February 12 at 1030 GMT, ranged from 4.20% to 5.10%. "Apart from wheat and vegetable oil (prices), all other food categories are showing signs of moderation. The softness in food prices, usually witnessed during winter months, is also supported by a healthy kharif (autumn season) output," said Sakshi Gupta, principal economist at HDFC Bank. Sharply falling inflation also gives the central bank some wiggle room in its new focus on addressing slowing economic growth as overall inflation is still above its 4.0% medium-term target. Kanika Pasricha, chief economic advisor at Union Bank of India, said "inflation pressures are moving towards their the coming three to six months" and expects "inflation settling down at 4%." The RBI's mandate is to keep inflation within a 2-6% target range. Core inflation, stripped of volatile food and energy prices, is expected to have risen slightly to 3.70% from an estimated 3.60% in December, the poll also found. The Indian statistics agency does not publish core inflation data.
