India inflation likely cooled to a three month low in January

BENGALURU, Feb 09 (Reuters): India's retail inflation likely eased to a three-month low of 5.09 per cent in January on slowing food price rises and favourable base effects, according to economists polled by Reuters who also predicted a moderation in core inflation to 3.70 per cent.

The Reserve Bank of India, which held its repo rate at 6.50 per cent for a sixth consecutive meeting on Feb. 8, highlighted "large and repetitive food price shocks" as one of the biggest risks to the ongoing disinflation trend.

After surging since November, food prices, which make up about half of the consumer price index (CPI) basket, eased last month, according to economists in the Feb. 5-8 Reuters poll.

Headline inflation, as measured by the annual change in the CPI, was forecast to fall to 5.09 per cent in January from 5.69 per cent in December, the survey of 44 economists showed.

That would still be above the 4 per cent mid-point of the central bank's medium-term target of 2 per cent-6 per cent. "We expect inflation in India eased in January on still elevated but falling food price growth," said Alexandra Hermann, lead economist at Oxford Economics.