India’s retail inflation likely rose last month after a three-month low in April, lifted by higher food and energy prices, but stayed within the Reserve Bank of India’s target range for the sixth consecutive month, a Reuters poll found.

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”In April, the retail prices of petroleum products were kept unchanged because of multiple state elections being held then, despite rising crude prices,” said Kunal Kundu, India economist at Societe Generale. ”But immediately thereafter, the retail prices were increased about seven times in May itself, which led to substantial shooting up of this inflation component.”

The June 4-9 poll of 40 economists showed consumer price inflation rose to 5.30 percent in May from a year ago, after dipping to a three-month low of 4.29 percent in April. If realised, inflation will have held within the RBI’s 2 percent-6 percent comfort range for the sixth month in a row.

While there were fewer supply chain disruptions during the recent pandemic lockdowns compared with last year, a general rise in inflation globally has elevated domestic price pressures.

”Higher international prices for commodities including crude, edible oils and gold are clearly spilling over into consumer inflation,” said Abhishek Upadhyay, senior economist at ICICI Securities PD.

Inflation was forecast to average 5.0 percent this fiscal year, according to a Reuters poll of economists late last month. That was similar to the RBI’s estimated average of 5.1 percent, at its June meeting.

Inflation holding within the target range will likely help the RBI to focus its policies more towards the economy, which has taken a hit from a second coronavirus wave.

Even before that wave struck, Asia’s third-largest economy expanded just 1.6 percent in the Jan-March quarter from a year ago. For this fiscal year, predictions for growth have been repeatedly downgraded by economists and major institutions in recent weeks.

”Concerns of pent-up demand coming in like last year are very curtailed because people have spent a large amount of their savings on health expenses,” said Yuvika Singhal, economist at QuantEco Research.

”Savings in the economy are depleted and … people would want to hold on to a certain amount of liquidity.”

While that suggests demand would be subdued, rising input costs were likely to pressure some components of the inflation basket higher. The wholesale price index was expected to rise 13.07 percent in May from a year ago, as compared to 10.49 percent in April.

”Upside risks emerge from generalised increase in input prices … starting to feed progressively into final prices charged to consumers,” added ICICI’s Upadhyay.

The poll also showed industrial output likely jumped 120.0 percent in April from a year ago, when it plunged 57.3 percent from a stringent lockdown imposed back then.

India’s infrastructure output – which comprises of eight main industries and accounts for about 40 percent of the total factories’ production – rose 56.1 percent in April.