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The
median forecast from the Reuters poll of 27 economists pegs it
at 5.50 percent for August, down from 6.07 percent in July.
The lower number is still above the Reserve Bank of India's
March 2017 inflation target of 5 percent and, if realized, would
be the fifth straight month that annual price rises stayed above
that mark.
"Owing to the unseasonal decline in prices of vegetables and
pulses, the month-on-month momentum in food inflation is likely
to have cooled off," said Jay Shankar, chief India economist at
Religare Capital Markets in Mumbai, who had the same call as the
wider poll median on inflation.
"(But) despite expectations of a sharp drop in CPI inflation, we
maintain that there is very limited headroom for further rate
cuts at the current juncture."
The Reserve Bank of India has chopped 150 basis points off its
benchmark interest rate since January 2015. A Reuters poll last
month suggested another cut was likely in the final three months
of this year.
In contrast to the slowdown in consumer inflation, economists in
the poll predicted wholesale price inflation to have picked up
to 4.01 percent in August from 3.55 percent in July.
The poll also showed that annual growth in industrial output was
expected to decelerate to 1.7 percent in July from June's
eight-month high of 2.1 percent, due to a slower pace of
expansion for electricity generation and mining.
Infrastructure output, which accounts for nearly a third of
total industrial production, grew at a slower annual pace of 3.2
percent in July.
A slowdown in industrial activity does not bode well for Asia's
third largest economy, especially after overall growth faltered
to a 15-month low between April and June.
(Polling by Shaloo Shrivastava and Khushboo Mittal; Editing by
Richard Borsuk)
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