Aug 16, 2022 03:51AM ET
By: AnalysisWatch
India's wholesale inflation rose 13.93% in July from a year earlier, helped by lower food prices, but remained in double digits for a 16th month amid expectations that the central bank will raise interest rates again next month.
In July, inflation based on the wholesale price index, which is similar to producer prices, rose lower than the 14.20 percent forecast in a Reuters poll of analysts and compared with 15.18 percent in the previous month.
Surprisingly, the wholesale retail price index inflation rate in May was revised to a record 16.63% year-on-year from 15.88% estimated earlier.
Economists said they expect the Reserve Bank of India to raise its key policy rate by at least 25 basis points next month as retail inflation is likely to remain above the permissible range this calendar year.
The monetary policy committee will meet on September 28–30.
Since May, the RBI's Monetary Policy Committee has raised the repo rate by 140 basis points, including by 50 bps this month, while the government has curbed exports of agricultural crops, including wheat and sugar, while cutting taxes on fuel.
Wholesale food prices, which contribute to about a quarter of the WPI, rose 9.41 per cent in July from 12.41 per cent in June, though fruit prices rose 29.44 per cent and vegetable prices 18.25 per cent year-on-year, data showed.
Separate data released last week showed India's consumer inflation eased to 6.71% in July, declining for a third month, helped by slower food and fuel price increases.
Comments