(LiveMint)
Rising food prices pushed India’s retail inflation to a 17-month high in December, breaching the Reserve Bank of India’s (RBI) medium-term target for the second straight month, which could intensify pressure for it to raise policy rates in the next few months.
India’s measure of consumer price inflation, the CPI index, rose 5.21% in December from a year earlier, the ministry of statistics said on Friday. Analysts polled by Reuters had predicted December’s retail inflation rate would climb to 5.10%, the highest since July 2016, from 4.88% in November. Annual retail food inflation rose 4.96% in December from 4.35% in the previous month.
RBI held its policy rate steady at 6.0% last month and said all possibilities were on the table, depending on how price pressures and growth panned out. The central bank, which has a medium-term inflation target of 4%, has raised its inflation estimate to 4.3% to 4.7% for the six months through March. But some analysts feel inflation could overshoot its estimates.
