India Inflation Rises More Than Expected

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India’s consumer price inflation accelerated more-than-expected in August, figures from the National Statistical Office revealed Monday.

Consumer price inflation rose to 7.00 percent in August from 6.71 percent in July. In the same period last year, inflation was 5.30 percent. The August rate was also slightly above economists’ forecast of 6.9 percent.

Food price inflation advanced to 7.62 percent in August from 6.69 percent in the previous month.

Month-on-month, consumer prices gained 0.52 percent and food prices moved up 0.75 percent in August.

At the rate-setting session in August, the Reserve Bank of India had estimated inflation to remain above the 6 percent, the upper end of the tolerance band, through the first three quarters of 2022-23. For the current fiscal year, the bank had projected inflation at 6.7 percent.

Shilan Shah, an economist at Capital Economics said the rise in overall inflation in August to further above the 2-6 percent target range should ensure that the central bank delivers another 50 basis point hike to the repo rate in its meeting at the end of this month.

But it will probably slow the pace of tightening in the following meeting in December, the economist noted.

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