India's June inflation slowest in more than five years
India's annual retail inflation eased in June to its slowest pace in more than five years, as food prices fell, building pressure on the central bank to cut interest rate when it meets for a monetary policy review on Aug 2.
The consumer price index rose 1.54 percent in the 12 months through June, down from an increase of 2.18 percent in the previous month and slower than the forecast of economists in a Reuters poll, data released by the Ministry of Statistics showed on Wednesday.
Economists in a Reuters poll had predicted inflation to ease to 1.7 percent last month.
This is the lowest inflation rate since India started releasing retail inflation data in January 2012 based on a combined CPI index for rural and urban consumers.
Elsewhere in Asia, China's annual consumer prices remained subdued at 1.5 percent in June.
With headline inflation remaining below the Reserve Bank of India's mid-term target of 4 percent for the past eight months, industry participants and the government have sought a cut in interest rates to support economic expansion.
Economists expect that the central bank to cut interest rates in its next policy review.
"We do expect a rate cut of 25 basis points in the August policy," said Anjali Verma, an economist with Phillip Capital India.
"Unless there is some major disappointment in the monsoon, I don't see any upside risk to inflation by March 2018."
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