VIEW In December, retail inflation in India increased to 5.69%.

January 12, Reuters According to government data released on Friday, India's annual retail inflation (INCPIY=ECI) increased to 5.69% in December from 5.55% in November.

A rate of 5.87% was predicted by 56 economists surveyed by Reuters.

Chief Economist Devendra Pant of India Ratings and Research, Gurugram

"In December 2023, core inflation dropped to a 48-month low of 3.89%. It is paradoxical to see declining core inflation at a period of robust economic expansion."

We predict that the base effect will be the primary cause of the inflation reduction to 5.3%–5.5% in January 2024. A protracted pause in policy rates is suggested by robust economic growth and inflation that averaged more than 5% in the fiscal year 2024."

Chief Economist Upadhya Bhardwaj of Kotak Mahindra Bank, Mumbai

"December's inflation rate was lower than anticipated, mostly due to a more pronounced slowdown in vegetable prices. Concurrently, the core inflation rate met our forecasts."

"We expect the Monetary Policy Committee (MPC) to continue to focus on its 4% inflation target and keep repo rate and policy stance unchanged in the February policy."

Sakshi gupta, principal economist, hdfc bank, gurugram

"Inflation may be on the decline in the upcoming months, with headline inflation predicted to reach 5.2% to 5.2% by March 2024."

"We do not see the Reserve Bank of India changing its stance in the February policy, and we continue to envisage a move on rates coming in the second quarter of fiscal 2025, despite the pleasant surprise on the inflation report."

Thamashi de silva, facial india economist, london capital economics

"We predict that in the upcoming months, the inflation of food prices will only slightly decrease."

"In the first half of the year, we also anticipate energy inflation to be flat, while there is an obvious upside risk to our prediction in the event that Middle East tensions rise."

"All things considered, headline inflation will gradually decline over the next few months and is unlikely to sustainably hit the 4% goal range (out of a range of 2% to 6%) until the second quarter."

Garima kapoor, mumbai; economist; institutional equities; elara capital

"Thanks to a strong base effect and ongoing core inflation decrease, India's December CPI of 5.75% met our expectations.

"We anticipate that this trend will continue and that the CPI will average 4.5% in fiscal 2025.

"In the second quarter of the 2025 fiscal year, the Monetary Policy Committee of the Indian central bank is expected to initiate its first rate reduction.

Abheek barua, chief economist, new delhi's hdfc bank

"There is no denying that inflation is trending downward, but supply chain issues and the turmoil in the Middle East prevent cuts from occurring before the middle of 2024."

Bonds may somewhat increase in value, and the argument for slightly more accommodating banking system liquidity grows."

Senior Economist Radhika Rao, DBS Bank, Singapore

"Food inflation is slightly higher than it was a year ago due to base effects, but pressures have decreased sequentially and the core reading is stable."

"The policy committee is relieved that the average inflation for the quarter is lower than the Reserve Bank of India's December prediction, indicating that rates will probably be held steady in the first half of 2024."