India: Slow energy cost transmission allows RBI to remain cautious – DBS
DBS Group Research Forecasts Slight Rise in India's CPI Inflation
According to DBS Group Research, India's Consumer Price Index (CPI) inflation for March is anticipated to increase to 3.45% year-on-year, up from 3.2%. This uptick is attributed to elevated costs for cooking gas, energy, and manufacturing inputs, while prices for retail fuel and food remain stable. A recent decline in precious metals has helped ease overall price pressures.
Headline Inflation Rises, Core Remains Low
- March's inflation rate is expected to climb to 3.45% year-on-year, reflecting higher costs in cooking gas, energy, and factory inputs, while retail fuel and food prices show little change.
- The correction in precious metals during the month has likely slowed the increase in related price components.
- DBS anticipates that the effects of rising energy prices will gradually become apparent in the coming months, as replacement supplies take time to reach the market.
- Core inflation is projected to stay below 4%, which supports the Reserve Bank of India's decision to maintain a neutral policy stance for now.
This article was generated with assistance from an AI tool and reviewed by an editor.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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