Data due on 1200 GMT, July 12

BENGALURU, July 11 Reuters India39;s retail inflation likely held steady in June, but well above the Reserve Bank of India39;s tolerance limit for a sixth month as lower fuel and cooking oil prices offset higher services and food costs, a Reuters poll found.

Despite a substantial recent increase in food prices, rising at the fastest pace in nearly two years, overall inflation was partly contained after the government cut taxes on petrol and diesel and imposed restrictions on food exports.

But most economists warned the nearterm outlook was highly uncertain as a heatwave last month pushed up vegetable prices. The government has also cut estimates of wheat production because of dry spells in northern India.

The July 48 Reuters poll of 42 economists showed inflation as measured by the consumer price index CPI was steady at an annual 7.03 in June, versus 7.04 in May.

Forecasts for the data, due at 1200 GMT on Tuesday, July 12, were in a 6.457.70 range.

If realised, inflation would be above 7 for the third consecutive month and above the RBI39;s 6 upper tolerance target for a sixth month.

While several goods and services categories are likely to report higher inflation in June, fiscal measures undertaken by the government…will help to cap the upside in domestic prices across food and other segments, noted Rahul Bajoria, chief India economist at Barclays.

Still, services costs are trending higher, and a passthrough from higher commodity…