Retail Inflation Slows to 3-Month Low: What Experts Say - NDTV

India's annual consumer price inflation unexpectedly slowed down to a three-month low of 5.17 per cent in March as food prices moderated, government data showed on Monday.

COMMENTARY

Jyotinder Kaur, principal economist at HDFC Bank:

"This allays some concerns about the impact of unseasonal rainfall (on headline inflation). Although it is far too early to tell, and the impact will unfold over the coming months, the fact that you are stepping into the tough period with a far more benign inflation print means you could be closer to the RBI's August print of 4 per cent than most analysts were expecting."

A Prasanna, economist at ICICI Securities Primary Dealership, Mumbai:

"The headline CPI is close to our expectations and confirms that inflation pressures continue to remain modest in India. The internals are more promising with key core components such as housing and miscellaneous experiencing softer inflation compared to our estimate."

"While core inflation appears to have bottomed out, it is not accelerating either. Food inflation has ticked up likely due to recent weather changes. Bottomline, based on this data, we continue to expect RBI to ease policy rates by another 25 bps by June. However, the central bank would also need evidence that the government is acting on incipient food price pressures."

R Sivakumar, head of fixed income for Axis Asset Management, Mumbai:

"Broadly, the number is in line with expectations. We agree with RBI's view that inflation should soften further in the coming months. The fact that core inflation is stuck at around 4 per cent for last two months means that the demand side inflationary pressures continue to remain weak."

Killol Pandya, senior fund manager at LIC Nomura MF Asset Management, Mumbai:

"Core inflation is the kernel. It is not bad news that core has hardened a bit but it makes view a bit mixed. Financial markets may see positive moves but that would not last."

"The RBI is not going to make any meaningful conclusions out of it. CPI being lower adds to the expectations of some more rate cuts in the future."

Samir Gilani, head-investment advisory at Radner Capital Advisors:

"The CPI numbers are looking better and the core (inflation) numbers were not that bad either. This would probably make a good enough reason for RBI to cut rates one more time."

"Because of unseasonal rains, the general expectation was that the number could be slightly higher. Markets are likely to react positively."

© Thomson Reuters 2015