New Delhi: India’s retail inflation rose to a five-month high of 7.41% year-on-year in September, driven by rising food prices, raising fears of a rate hike when the central bank meets for its next policy review in December. Is.
The latest data shows that retail inflation has remained above the Reserve Bank of India’s target for three quarters, which means it will have to report to the government why it failed to meet the target and what action it will take.
Annual retail inflation in September was higher than the 7.3% forecast in a Reuters poll of economists, and up from 7% last month, data released by the Office for National Statistics showed on Wednesday.
The inflation-targeted Monetary Policy Committee (MPC) of the RBI, set up in 2016, is mandated to keep inflation within a 2 percentage point increase band on either side of its 4% target.
Officials say the RBI and Prime Minister Narendra Modi’s administration are in agreement, that inflation was driven by external factors, which included a rise in energy and food prices after Russia’s February 24 invasion of Ukraine, and that prices were driven down by the government. will take more time.
Economists said the RBI’s MPC has raised rates by 190 basis points since May, and is widely expected to increase rates by at least 25 bps in its next meeting from December 5-7.
Food inflation, which accounts for about 40% of the CPI basket, rose 8.60% year-on-year in September, compared to 7.62% in August.
More than 10% depreciation of India’s rupee against the dollar this year has made imports expensive for consumers and businesses.
Fuel and electricity prices rose 11.44% year-on-year in September, compared to a 10.78% increase in the previous month, the data showed.
After the data was released three economists said core inflation, excluding volatile food and energy prices, was estimated at 6.07%-6.1% in September, compared to the 5.84%-5.90% estimate in August.
India does not release key inflation data. ,Reuters
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