India's retail inflation data expected tomorrow. Analysts estimate a rise in December CPI

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India inflation likely crept closer to 6% in December: Mint poll Experts do not appear concerned about the mild spike in inflation as they note that core inflation, which excludes volatile items like food and fuel, may have moderated last month. Sujan Hajra, Chief Economist at Anand Rathi Shares & Stock Brokers expects CPI inflation to notch up to 5.72 per cent in December 2023.

"This will be the third consecutive month where food inflation has accelerated primarily driven by pulses, tomatoes, and onions," Hajra said. Although topline inflation is on an upward trajectory, Hajra believes it is not a cause of concern for two reasons: first, core inflation is expected to keep decreasing, showing that the fluctuation in food inflation is not widespread; and second, the RBI had already factored in the uptick in inflation during its December 2023 policy meeting, aligning with the current developments.

Global financial firm Barclays estimates that CPI inflation rose modestly in December to 5.6 per cent year-on-year (YoY), driven higher mostly by unfavourable base effects. Barclays expects core inflation to continue its moderating trend, slowing to 3.99 per cent year-on-year in December from 4.05 per cent in November.

Also Read: CPI preview: Inflation turning benign, core inflation could fall below 4%, says Barclays On the other hand, Teresa John, Deputy Head of Research and Economist at Nirmal Bang expects CPI inflation to remain steady at 5.55 per cent in December, unchanged from November. According to John, the sequential rise in prices in categories such as cereals and pulses was modest or flat while oil and fats inflation continued to decline month-on-month.