NEW DELHI -- India's inflation rate continued to climb in June, led by a rise in fuel prices that added fire to already simmering non-food prices and cementing expectations of another interest-rate hike this month.
[inflation0714] Reuters
People shop at an open air market in Ahmedabad, India, July 13, 2010.
The benchmark wholesale price index rose 10.55% from a year earlier in June, higher than the 10.16% rise in May. The reading was below market expectations of a 10.9% rise, the median estimate in a Dow Jones Newswires poll of 17 economists.
The government Wednesday also raised the April inflation reading to 11.23% from a provisional 9.59%. It previously had made similar upward revisions to the February and March readings, suggesting it may be a step behind in anticipating inflationary pressures.
"There is a real risk that this (double-digit inflation) will impact inflation expectations and make it even more difficult to get price pressures under control," said Brian Jackson, senior emerging-markets strategist at Royal Bank Of Canada.
The data shows the Reserve Bank of India, which has been proactive in raising rates, still has more work to do, Mr. Jackson added.
He expects the central bank to increase its key lending and borrowing rates by 0.75 percentage points by the end of the year, starting with its July 27 rate-setting meeting.
Inflation in India has been hovering close to double digits in recent months, ignoring fiscal and monetary steps as price pressures that were largely concentrated in food items are spreading to other commodities.
Latest data shows prices of primary articles in June rose 16.28% from a year earlier, mostly due to an increase in prices of food articles such as pulses, fruits and milk as well as non-food articles including fibres and minerals.
The fuel index rose 14.32% while the June index of manufactured products was 6.6% higher from the year-earlier level.Replica Rolex Sea Dweller
Finance Secretary Ashok Chawla told Dow Jones Newswires in an interview late Tuesday that food inflation is expected to ease in a couple of months while the overall inflation rate will come down to 6% by December.
Replica Rolex Submariner
Montek Singh Ahluwalia, deputy chairman of the Planning Commission, the top government think tank, concurs with the view.
"When you get inflation this high it takes time to bring it down and I believe it is coming down," Mr. Ahluwalia said Wednesday. "By the end of this year, you will see inflation well below double digits," he added. ;Rolex Day Date Watches
Wednesday, July 14, 2010
Subscribe to:
Comments (Atom)