By Vivek Mishra

BENGALURU (Reuters) – India’s consumer price inflation likely fell to 5.3% in December as food price increases moderated, a Reuters poll of economists showed, bolstering the expectations for a central bank interest rate cut next month amid slowing economic growth.

Food prices, which make up nearly half of the country’s consumer price index (CPI) basket, have continued to rise in inflation in recent months, largely driven by a continued surge in vegetable prices, most of which rose in double digits in one year.

However, they have started to ease thanks to a bumper summer harvest supported by favorable rains, offering hope for more moderation in the coming months.

The January 6-9 Reuters poll of 43 economists showed inflation as measured by the annual change in the consumer price index (CPI) fell to 5.30% in December from 5.48% in November.

Estimates for the data, scheduled to be released on January 13 at 1030 GMT, ranged from 4.50% to 5.60%.

“The slow pace of inflation is due to a delayed correction in vegetable prices given the unseasonal rains in October and upward momentum seen in other food sub-segments such as in edible oil, cereals, with some cooling seen in December,” wrote Kanika Pasricha, chief economic adviser of UNIONS Bank of India (NS:).

Core inflation, which excludes volatile items such as food and energy and is seen as a better gauge of domestic demand, was forecast at 3.70% in December, according to the median estimate from a smaller sample of 17 economists.

India’s statistics agency does not publish core inflation data. Economists estimate that it will be between 3.64% and 3.70% in November.

While price increases are modest, inflation is not expected to return to the central bank’s 4% medium-term target until the second half of 2026, a separate Reuters poll showed.

The majority of economists in a survey taken last month, before Sanjay Malhotra was appointed as Reserve Bank of India (NS:) (RBI) Governor to replace Shaktikanta Das, indicated that the central bank will cut in its key interest rate by 25 basis points to 6.25% at the February 5-7 policy meeting.

This is mainly to support the economy, which grew around 7-8% but slowed to more than 5% in the July-September quarter.

“We continue to expect a rate cut from the RBI in February with growth likely to undershoot the RBI’s 6.6% forecast,” Teresa John, deputy head of research and economist with Nirmal Bang Institutional Equities, wrote in a brief. that letter.

The wholesale price index-based inflation is expected to increase to 2.30% last month from 1.89% in November, the survey also showed.