Site icon TheDailyCheck.net

India’s inflation likely remained steady at 5.60% in August

India’s retail inflation held steady in August, staying within the central bank’s comfort zone for a second month as a moderation in food price rise was offset by continued supply-chain disruptions, a Reuters poll predicted.

The Sept. 6-8 poll of 41 economists put consumer price inflation at 5.60% in August from a year earlier, little changed from a three-month low of 5.59% in July.

If confirmed, inflation would be within the Reserve Bank of India’s (RBI) 2-6% comfort range for a second month. But it has been above the medium-term target of 4% for nearly two years.

“August inflation is expected to stabilise around July numbers and drift lower over the remaining months of 2021 on base effects and ebbing food prices,” said Radhika Rao, economist at DBS Bank.

Forecasts in the poll ranged from 5.10% to 5.90% – underscoring uncertainty that high inflation is only transitory.

“The central bank’s revised forecasts already accommodate upside risks to inflation, with the outcome unlikely to influence policy in either direction,” added DBS Bank’s Rao.

Last month, the central bank held its monetary policy loose, but cited concerns about inflationary pressures on the economy.

In a separate Reuters poll, the RBI – which slashed its key interest rate by a cumulative 115 basis points last year – was expected to keep its policy unchanged until at least April as it prioritises growth over inflation.

Despite the devastation of the second wave of the coronavirus, India’s economy grew at its fastest ever rate in the June quarter, supported by a low base of a record contraction a year earlier and a strong rebound in manufacturing.

The RBI also kept its growth forecast at 9.5% for this fiscal year.

“With growth on the path of recovery and a moderation in headline inflation, the stickiness of core inflation will become a source of discomfort for MPC members in the coming months despite the demonstrable dovish bias,” said Kaushik Das, chief India economist at Deutsche Bank, referring to the RBI’s monetary policy committee (MPC).

The latest poll also showed industrial output expanded 10.7% in July from a year ago, compared with 13.6% in June.

India’s infrastructure output – which comprises of eight main industries and accounts for about 40% of total factory production – rose 9.4% in July.

For all the latest Business News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! TheDailyCheck is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – abuse@thedailycheck.net The content will be deleted within 24 hours.
Exit mobile version