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DBS expects India July inflation to hold near 4.4% yoy

DBS projects India’s trade deficit will stay around USD 29 to 30 billion as exports remain resilient but imports strengthen.

Reported · Written up by our desk · EM Currencies

DBS Group Research’s Econs team expects India’s July inflation to remain steady at 4.4% year on year, with core readings staying below 4% due to softer prices in precious metals, according to FXStreet.

The note points to mixed trends across food staples, with indications of a rise in pulses, sugar, milk and edible oils, while vegetables are expected to stabilize, helped by a catch-up in rainfall that boosted sowing activity.

DBS also expects fuel price adjustments to flow through to utilities and fuel components, while core inflation should remain benign in July, supported by moderation in precious metals.

On trade, DBS projects resilient exports but stronger imports, keeping the trade deficit near USD 29 to 30 billion, with India’s inflation and trade data due in the second week of August.

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