India’s retail inflation which has surprised on the upside for the first two months of the calendar year is expected to fall below the Reserve Bank of India’s (RBI) upper bound of 6 per cent in March because of the softness in food inflation.

A panel of 25 economists tracked by Bloomberg said in poll they estimate 5.7 per cent inflation for March.

A Reuters poll of economists showed they have forecast 5.8 per cent inflation last month.

The March inflation numbers will be declared on Wednesday.

Analysts now expect prices to moderate especially after the RBI kept its policy repo rate unchanged last week.

While RBI governor Shaktikanta Das stressed the pause in rates was only for that meeting, analysts are not buying his view and are expecting an extended pause.

While some economists feel the RBI may cut interest rates next year, a few are not ruling out the possibility of a cut later this year itself.

Headline inflation based on the consumer price index (CPI) rose from 5.7 per cent in December 2022 to 6.52 per cent in January 2023 and to 6.4 per cent in February 2023 on the back of higher inflation in cereals, milk and fruits and slower deflation in vegetables prices.

However, core inflation (CPI excluding food and fuel inflation) which has posed a challenge remained sticky and was above 6 per cent in the first two months of the calendar year.

"Amid moderating food prices, we expect a high base to pull the March CPI down to 5.7 per cent year-on-year, with most of the moderation felt in food inflation," Rahul Bajoria, chief economist at Barclays, said.