India’s retail inflation edged up to a four-month high in March, led by an increase in food and fuel prices, but remained within the Reserve Bank of India‘s target range, a Reuters poll predicted. The April 5-8 poll of more than 50 economists showed retail inflation rose to 5.40% in March from a year earlier as opposed to 5.03% in February. Forecasts ranged from 4.60% to 6.11%.

“Although India’s core inflation has remained elevated for a while, the recent acceleration in headline inflation largely reflects higher food prices,” said Tuuli McCully, head of Asia-Pacific economics at Scotia Bank. “I expect the pickup to be a temporary phenomenon, yet there are significant risks surrounding the inflation outlook.”

The RBI raised its inflation projection for the first half of this fiscal year to 5.2% on Wednesday, still within the RBI’s target range of 2%-6%. “With some cities already under COVID-19 lockdown and maybe more facing the same risk, the panic-buying like a year ago may set in to pressure inflation further up in the months ahead,” said Prakash Sakpal, senior Asia economist at ING. The RBI kept the key repo rate at a record low of 4.0% and its monetary policy accommodative amid concerns of rising COVID-19 cases that could derail the nascent recovery. Asia’s third-largest economy grew 0.4% in the Oct-Dec quarter after contracting for two consecutive quarters, its deepest recession in about four decades.