Preview: India's January inflation likely at more than 3-year low


"There could be a little bit of a potential uptick in food inflation on the back of some of the weather related factors we have had more recently," said Leif Eskesen, HSBC's chief economist for India and Southeast Asia.

The main concern is onion prices, the staple ingredient in Indian cuisine, which have more than doubled in the last three months as supplies remained tight.

India's 1.2 billion inhabitants chomp their way through 15 million tonnes of onions a year, using them as the base for most traditional curries, and when prices rise it gives a significant kick to inflation.

While food prices have kept headline inflation high, core inflation - non-food items and manufacturing - extended its downward trend and dropped to 4.2 percent in December.

The government, which fixes the retail price of diesel, last month told retailers to raise the price of the subsidised fuel in small amounts every month, a move aimed at propping up public finances.

"We wont necessarily see much of the impact from the hike in diesel prices because it was relatively limited and also towards the middle of the month but there could be some slight uptick in energy related prices," Eskesen said.

India is the world's fourth biggest oil importer.

Please read our terms of use before posting comments
TERMS OF USE: The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).
comments powered by Disqus