India's annual retail inflation accelerated in December to a 17-month high of 5.21 percent, government data showed on Friday, mainly driven by faster rises in prices of food and fuel products.
Analysts polled by Reuters had forecast December's CPI inflation to rise to 5.10 percent from November's 4.88 percent.
TIRTHANKAR PATNAIK, INDIA STRATEGIST, MIZUHO BANK, MUMBAI
"It's slightly higher than our estimate. We believe that current rate easing cycle by the central bank is over for now. And, with inflation expected to continue to taper up all the way until the middle of the year, we do not expect any kind of changes in the policy rate until the end of the year."
TUSHAR ARORA, SENIOR ECONOMIST, HDFC BANK, NEW DELHI
"The number is in line with our expectations. Going ahead, consumer inflation is likely to rise further and move close to a 6 percent level by the summer. This could spark fears of a rate hike and be unsettling for the markets. However, the central bank could still stay put in the near term, so as to wait and see if the inflationary pressures are temporary or permanent in nature."
SUMEDH DEORUKHKAR, SENIOR ECONOMIST, BBVA, HONG KONG
"Looking ahead, we think that risks to inflation are tilted to the upside, at least over the next two quarters."
"Seeking greater clarity on the growth-inflation dynamic, we expect RBI to maintain status quo on rates and a neutral policy guidance in 2018."
RADHIKA RAO, GROUP ECONOMIST, DBS, SINGAPORE
"Food and fuel inflation has driven up the headline, with core converging with the headline."
"The CPI trajectory is likely to track higher than the RBI's fan chart for the quarter, turning focus on policy direction."
ANJALI VERMA, ECONOMIST, PHILLIPCAPITAL INDIA, MUMBAI
"CPI is lower than what I was expecting. There's a sharper drop in food inflation than what I was anticipating. That is what had led to the CPI number being lower than our expectation. The rest is all in line with our expectations. This should not make any difference to the RBI, which is expected to stay on hold."
"While it is in line with consensus, the drop in food inflation, I think, will be taken as a slight positive from the bond yield point of view, because in general the worry was that food inflation will not reverse even when this is the time for it to reverse."
(Reporting by Bengaluru and Mumbai Bureaus; Editing by Euan Rocha)