Analysts at TDS point out that India’s headline CPI in April came in higher than expected, with core CPI also rising sharply. Higher gasoline and diesel prices will continue to result in upside inflation risks despite muted food price inflation.
Key Quotes
“As such the RBI revised higher its inflation forecasts in the wake of its surprise rate hike last week. We think risks to May CPI are also on the upside (TD 4.60 % y/y, Consensus 4.90% y/y). A higher than consensus outcome would increase the odds of another rate hike in August.”
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