Indian headline consumer price inflation likely to have moderated in March

Indian March inflation and February industrial production figures are set to be released this week. According to a DBS Bank research report, the headline consumer price inflation is likely to have moderated to 4.1 percent year-on-year from February’s 4.4 percent, on the back to a seasonal deceleration in food prices. The fuel index is expected to record a smaller year-on-year rise in global oil prices, but the comparatively stable service categories would keep the core stable at about 5 percent. Factoring the forecast, first quarter 2018 average stands at 4.5 percent, consistent with the central bank’s revised estimate last week, stated DBS Bank.

Meanwhile, industrial production is expected to have decelerated a bit to 6.5 percent in February from January’s 7.5 percent, a payback after three straight months of stable sequential gains. Overall, a benign inflation path in spite of better growth figures is expected to see Indian policy rates chart a stable course in 2018, said DBS Bank.

“March trade deficit is poised to have flatlined at USD12.5bn, taking the FY18 trade gap to the widest since FY13”, added DBS Bank.

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