India: Inflation risks stay skewed higher – ING

FXStreet Insights Team FXStreet

ING economists Deepali Bhargava and Lynn Song project India’s consumer inflation to edge up to 4.2% year-on-year in June, while wholesale inflation moderates to 9%. They highlight that lower Brent prices should ease wholesale costs, but persistent retail fuel prices, firmer food inflation and sticky core pressures keep overall inflation risks tilted to the upside over the coming months.

Wholesale easing, consumer prices stay sticky

"We expect India’s consumer price inflation to edge slightly higher to 4.2% year-on-year in June, while wholesale price inflation is likely to moderate to 9%."

"Softer Brent crude prices should pull wholesale prices lower, but persistent retail fuel costs, gradually firming food inflation and sticky core pressures point to a mild uptick in consumer inflation."

"The gradual pass-through of wholesale prices to retail prices, meanwhile, is expected to support underlying inflation pressures."

"Overall, inflation risks remain tilted to the upside, as El Niño-related weather disruptions threaten food costs."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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FXStreet Insights Team

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The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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