India's annual retail inflation picked up in March to 2.86 percent compared with 2.57 percent in February, government data showed on Friday.
Analysts polled by Reuters had forecast that India's retail inflation will accelerate in March on slightly higher food prices but remain under the Reserve Bank of India's medium-term target of 4 percent.
According to a Reuters poll last week, economic growth is forecast to average 7.2 percent over the coming year.
RUPA REGE NITSURE, CHIEF ECONOMIST, L&T FINANCE HOLDING, MUMBAI
"That's a very disappointing data showing a significant loss of growth momentum. This clearly means economic activity is slowing led by weakening demand.
"The overall consumer price index at 2.86 percent is primarily due to a year-on-year pick in fuel inflation and food inflation re-entering a positive zone, but food inflation is still very weak.
"Given the overall demand situation and good surpluses of food grains, I don't think El Nino would lead to any significant spikes.
"The Reserve Bank of India has scope to manage sentiment through liquidity creation and rate cutting. What is worrying is the reversal in production growth of capital goods, which signal a slowdown in investment demand."
SUJAN HAJRA, CHIEF ECONOMIST, ANAND RATHI SECURITIES, MUMBAI
"Both the CPI and IIP numbers are largely on expected lines. It shows that growth slump is persisting with manufacturing being the worst-hit segment.
"Inflation, despite hardening, remains extremely benign as compared with the longer-term trend. So we expect the RBI to continue with neutral rate and accommodative liquidity stance. We expect 25-50 bps rate cut in 2019. However, after two successive cuts, the RBI may pause in the next policy.
"Food has high weight in CPI. So any adverse impact on agriculture output coupled with already announced high MSPs can lead to a quick jump in CPI.
"The RBI has made it explicit that their inflation projections are under the assumption of normal monsoon. So in the event of El Nino, the risk is substantial."
GAURAV DUA, MARKET RESEARCH HEAD, SHAREKHAN, MUMBAI
"Though inflation inched up in March, it would remain well under the RBI's comfort level of 4 percent despite possibility of below-normal monsoons.
"Apart from policy priorities of a new government, the rate cut decision is data-dependent and the data could remain benign.
"Growth slowdown driven by weakness in consumer demand would be an important factor influencing the RBI's monetary stance."
RADHIKA RAO, ECONOMIST, DBS BANK, SINGAPORE
"Pickup in March inflation was close to our expectations. Outcome validates the central bank's move to be confident on a benign inflationary trend, but prefer to stay data-dependent as inflation is expected to grind higher after hitting bottom in January 2019.
"After a neutral cut in April, the door is still open for late-cycle easing in June or August. Oil prices and monsoon strength are two factors that are likely to be watched closely."
TUSHAR ARORA, SENIOR ECONOMIST, HDFC BANK, NEW DELHI
"A modest rise in inflation was on the cards. Some sequential pick-up in food is expected in the summer months. What's comforting is that inflation still remains within the targeted range of the Reserve Bank of India and in line with the trajectory outlined by the central bank. We expect one more rate cut by the RBI this year.
"However, oil prices, fiscal math of the new government and food trajectory during the summer months are some unknown variables and the MPC would like to wait for some time to gain more clarity on these factors before making its next move."
SHASHANK MENDIRATTA, ECONOMIST, IBM, NEW DELHI
"While food prices were expectedly a key driver of the uptick in March headline inflation, they still remain benign relative to historical standard.
"The impact of El Nino on monsoon and food prices is a risk going forward though it is too early to worry about it as not all El Nino years have led to a spike in inflation in the past.
"The central bank will also focus on aiding growth amid downside risks especially weak global demand.
"Overall, inflation remains benign and well below the RBI's inflation target of 4 percent. This is the eighth consecutive month where CPI undershot RBI's inflation target."