CPI inflation to rise in coming months driven by economic recovery: Experts

Morgan Stanley expects CPI inflation to rise to a peak of 5.3% in June 2018 quarter before moderating to 4.4% by end-2018

CPI inflation is expected to firm up in the coming months driven by a cyclical recovery in the economy and further implementation of pay commission-related hikes by states, according to experts.

Price pressures have been relatively subdued in the early part of the calendar year, as weak demand conditions and demonetisation program weighed on inflation. However, going forward, Consumer Price Index (CPI) based inflation is expected to rise in a cyclical form, they said.

Stronger food and fuel inflation pushed up headline CPI inflation in October to a 7-month high of 3.58 per cent.

According to Japanese financial services firm