New Delhi September 12 2022: India’s retail inflation accelerated in August after easing for three months, posing a fresh challenge to the central bank’s efforts to cool prices.
Consumer prices rose 7% last month from a year earlier, data released by the Statistics Ministry showed Monday. That’s faster than an estimate of a 6.90% gain in a Bloomberg survey of economists and compares with a 6.71% reading in July.
Food prices, which comprise about half of the inflation basket, accelerated 7.62% in August while fuel and electricity prices went up 10.78% from a year ago, according to the government. Clothing and footwear prices increased 9.91%, while housing prices jumped 4.06%. Food costs rose as erratic monsoon rains and record heatwave hit farm output, offsetting the slump in global commodity prices.
The latest print adds pressure on the Reserve Bank of India that’s seeking to cool price gains back to its 2%-6% target while shielding the economy in the face of a global slowdown. The central bank has raised the benchmark policy rate by 140 basis points so far and is scheduled to hold its next rate review on Sept. 30.
Meanwhile, industrial output rose to 2.4% in July from a year ago, data released separately by the Statistics Ministry showed. That compares with the survey estimate of a 4.2% increase and a 12.3% growth in June.