According to Jinshi, Barclays economists predict that India's consumer inflation will fall sharply in the coming months, but the Reserve Bank of India may still wait for signs of a sustained decline before taking any action. Seasonal increases in food prices may keep the inflation decline in June mild, but base effects are expected to push overall inflation down sharply in the third quarter, and consumer inflation may be below 4%. Barclays said that the Reserve Bank of India is likely to remain unchanged in the short term, keeping a close eye on the impact of the monsoon and commodity prices, as it seems to see that the overall CPI is in line with the target. The agency expects that the window for interest rate cuts will open in December, but if inflation does not develop as expected by the Reserve Bank of India, the rate cut may be delayed.
