BENGALURU/MUMBAI (Reuters) - India's retail inflation rate eased to 4.17 percent in July after touching a five-month high of 5.0 percent in the previous month, government data showed on Monday, helped by smaller increases in food prices.
Analysts polled by Reuters had forecast July's annual increase in the consumer price index at 4.51 percent, compared with June's 5.00 percent.
COMMENTARY
ADITI NAYAR, PRINCIPAL ECONOMIST, ICRA LTD, GURUGRAM
"Surprises from fruit, vegetables, clothing and footwear, and pan, tobacco and intoxicants contributed to a substantial correction in the headline CPI inflation in July 2018."
"If the recent depreciation of the INR sustains, it may modestly feed into the CPI inflation over the near term. Crude oil prices continue to display a volatile trend, driven by geopolitical risks and concerns regarding supply as well as demand in various parts of the world."
"The CPI inflation in Q2 FY2019 looks set to lag the MPC's estimate of 4.6 percent, reducing the likelihood of a rate hike in the October 2018 policy review."
RUPA REGE NITSURE, CHIEF ECONOMIST, L&T FINANCE HOLDINGS, MUMBAI
"As per our expectations, headline CPI has significantly slowed to 4.17 percent, helped by a favourable statistical base for food articles, plus housing and some consumables. However, elevated fuel prices have capped the decline. Core inflation continues to stay sticky around 6.28 percent. Support of favourable statistical base will continue until end December."
"Going by today's print, I expect the RBI to take a pause until December at least. However, INR depreciation remains a major risk to inflation besides the sticky core inflation."
TUSHAR ARORA, SENIOR ECONOMIST, HDFC BANK, NEW DELHI
"The comforting part is that the rise in food prices has been lower than the historical trend in the summer months. The worrisome part is that core inflation continues to be high. RBI is taking a long-term perspective... But the long-term risks are still very much there. Thus, another rate hike is still on the table in my view."
(Reporting by Tanvi Mehta and Chris Thomas in Bengaluru and Swati Bhat in Mumbai; Editing by Subhranshu Sahu)
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