Indian consumer inflation probably fell to a record low in November, dragged down by falling food and fuel prices, while growth in core industries nudged factory output up in October, a Reuters poll showed.
The latest survey of 36 economists forecast that retail inflation cooled to an annual rate of 4.50 percent from October’s 5.52 percent.
That would make it the lowest since the government started releasing the data in 2012. Official retail inflation data will be released on Friday.
Wholesale price inflation was forecast to slow to 1.41 percent in November from 1.77 percent in October, making a new five-year low. The data will be released on Dec. 15.
“Continued steep declines in food and fuel prices, as well as subdued core pressures, mean that consumer price inflation is likely to have dropped to a record low in November,” wrote Shilan Shah, Capital Economics’ India economist, in a note.
While expecting some acceleration in inflation during coming months, partly due to the unwinding of a favourable base effect, the Reserve Bank of India raised hopes at a policy review last week that it would cut interest rates once it becomes more sure that inflationary pressures are waning.
The Reuters poll also forecast that production at India’s factories, mines and utilities rose an annual 2.80 percent in October compared to 2.50 percent in September.
Data last week showed annual infrastructure output, which accounts for more than a third of overall factory production, accelerated to a four-month high of 6.3 percent in October.
The uptrend in industrial production will probably continue, according to a private survey earlier this month which showed strong demand meant factory activity expanded at its fastest pace in nearly two years in November.
The positive data suggests the economy may be gaining momentum after losing some steam in the July-September quarter.
“A recovery is certainly underway. Its sustainability depends critically on the continued efforts by the government to resolve the issues surrounding stalled projects,” said Rupa Rege Nitsure, chief economist at Bank of Baroda.