Economists have questioned the RBI’s projection that inflation will glide down to 4 per cent levels by the end of the next fiscal.

They said the upward pressure on prices is likely to persist at least in the near-term on higher input costs amid supply chain bottlenecks.

The RBI on Wednesday surprised observers when it retained its retail inflation forecast at 5.3 per cent for 2021-22 Reserve Bank deputy-governor Michael Patra had said inflation could come between 4 per cent and 4.3 per cent by the end of next fiscal — in the median range of its 2-6 per cent target.

Patra said core inflation — the non-food, non-fuel print — will fall from a high of 5.8 per cent in October because of the duty cuts on petrol and diesel, with partial impact seen in November and a bigger impact in December, while the full impact will last a full year.

Besides, the supply chain bottleneck is easing with reduced congestion at ports and the greater availability of containers.

However, economists remain sceptical.

Abheek Barua, chief economist at HDFC Bank, said the pressures of higher input and fuel costs are likely to stay. “We do not see the inflation trajectory to be as benign and expect inflation prints to surprise on the upside and average at 5.6 per cent for 2021-22, driven by elevated input and fuel costs and as the base effect wanes off.” He also pointed to the possibility of prolonged elevated core inflation feeding into household expectations and becoming more entrenched in the system.

Soumya Kanti Ghosh, group chief economic adviser, State Bank of India, also feels that core inflation could play spoilsport. “We believe inflation management could pose a challenge to the RBI as cost-push pressures from high industrial raw material prices, transportation costs, and global logistics and supply chain bottlenecks continue to impinge on core inflation,’’ Ghosh said in a note.

A Reuters poll of 29 economists reveals that they expect retail inflation in November to accelerate towards the upper bound of the RBI’s target range of 2-6 per cent as fruit and vegetable prices rose.

The poll forecast inflation at 5.10 per cent, which is within the band, but higher than the 4.48 per cent in October. The forecasts ranged between 4.5 per cent and 5.32 per cent. Inflation data is due on Friday.