Consumer inflation, measured by the annual change in the consumer price index (CPI), is expected to have quickened to 4.3% in June from 3.93% in May, 37 economists forecast in the poll conducted July 3-9.
Estimates for the data, due to be released on July 13, ranged from 3.65% to 5.50%.
This would also be the highest inflation reading since India introduced its revised consumer price index series with a new base year and updated consumption basket in January.
“The expected increase is less a reflection of broad-based inflationary pressures and more a consequence of a gradual firming in food, fuel and select services categories over recent months,” noted Kunal Kundu, India economist at Societe Generale.
“At the same time, despite a growing divergence between wholesale and consumer prices following the sharp increase in global commodity and energy costs, the transmission from producer prices to retail inflation is likely to remain partial and delayed.”
Food price pressures could build further if El Nino, a weather pattern typically associated with weaker monsoon rains in India, disrupts crop production during the June-September season.Retail fuel prices also remained elevated after state-owned fuel retailers raised prices four times in May, increasing transportation and logistics costs.
With fears that renewed U.S.-Iran hostilities could once again send oil prices spiking, some economists said the risks to the inflation outlook remained to the upside.
RBI held its key interest rate unchanged at 5.25% last month, in line with expectations. However, a majority of respondents in a survey conducted before the meeting had expected at least one increase by year-end.
The latest Reuters survey showed wholesale price inflation likely eased only marginally to 9.15% in June from 9.68% in May. Wholesale inflation, which assigns a much larger weight to fuel products than the consumer price index, has remained elevated despite headline consumer inflation coming in below expectations in May.
Core inflation, which excludes volatile food and fuel prices, was expected to be at 3.95% in June. India does not publish official core inflation data.