India’s Consumer Inflation Rose After Four Months

The consumer inflation in India is rising following the successive easing in the past three months despite food costs is gaining momentum. It is anticipated to remain below the target value of the central bank. The Consumer Price Index as the major policy target of the country,  increased by 1.87 percent in July compared a year ago. It augmented by 1.54 percent since June as stated by the polls from Reuters.

On the other hand,  the retail food prices declined for two months until June compared to the previous year which is presumed to further decline because of heavy rainfall that affects 50 percent of the CPI.

Inflationary easing caused the central bank to reduce its main policy rate by 25 basis points to 6 percent early this month, which has been the lowest rate since November 2010. This is the primary easing of the bank but pertaining to a neutral stance. However, they advised that inflation could gain momentum once again. The Reserve Bank of India predicts retail inflation to rise from 3.5 percent to 4.5 percent in the last quarter of the year.