Headline Inflation Seen Little Changed in February

February CPI data will cross shortly (12:00GMT), where the median estimate of the Bloomberg survey of analysts sees the headline figure moderating marginally from +5.10% y/y in January to +5.04%. Industrial production figures will also be released (Est: +4.1% y/y; Prior: +3.8%)

• With seasonal vegetable prices settling back down again, ING anticipate CPI coming in at +5.05% y/y. While they note this is still in the upper half of the RBI’s target inflation range, they say it is unlikely to prove a substantial impediment to easing once global conditions have become more conducive to rate cuts.
• Meanwhile, JP Morgan expect CPI to come in at 5.10% y/y, unchanged from January. They say the softening in food prices has been modest with vegetables and pulses witnessing only a minor fall. Core-core inflation (core ex petrol and diesel) is expected to come in at 0.3% m/m, the same as last month, which would translate into a 3.6% y/y print – a record low in the series.
• Goldman Sachs also expect headline CPI inflation to remain unchanged at 5.1% y/y. Despite a sequential contraction in food prices, GS expect food price inflation to remain elevated at 7.5% y/y on the back of a lower base. They estimate core inflation (headline inflation excluding food and fuel inflation) to decline slightly to 3.5% y/y from 3.6% y/y in January on the back of lower core goods and services inflation.