DBS Sees India June CPI Inflation Rising to 4.1% on Food, Fuel

DBS economist Radhika Rao expects India's June consumer price index (CPI) inflation to increase to 4.1% year-on-year, versus 4.0% consensus, from 3.9% in May. The uptick is attributed to normalization in food prices and fuel cost dynamics. Rao notes that monsoon rains may provide some support, potentially tempering upward pressure.

The Reserve Bank of India has kept the repo rate at 6.50% with a neutral stance. An inflation rise within the central bank's 2-6% target band is unlikely to trigger immediate policy action, but the trajectory will be monitored closely for any persistent deviation.