India's wholesale price inflation accelerated to a seven-month high in September pressured by high food and fuel prices, increasing the chance that the central bank may raise interest rates later this month despite weakening economic growth.
The wholesale price index, the country's main inflation gauge, rose 6.46% from a year earlier, compared with August's 6.10% increase, according to data released Monday by the Ministry of Commerce and Industry.
The reading was higher than the median estimate of 6.00% in a poll of 13 economists by The Wall Street Journal.
The government also revised higher July's inflation reading to 5.85% from 5.79% reported earlier.
Inflation has hovered at levels above the central bank's comfort zone of 5.0% since June, driven by a sharp rise in food prices after heavy rainfall damaged crops in northern India. Regular increases in domestic fuel prices in recent months as a weak rupee pushed up India's import costs have also stoked prices.
Economists say with inflation sustaining at levels the Reserve Bank of India believes aren't tolerable, another increase in monetary policy rates can't be ruled out.
Last month, the RBI surprised markets by raising its main lending rate by a quarter-percentage-point. It will next review monetary policy on Oct. 29.
High interest rates have been an important reason dragging India's growth. The south Asian economy grew 4.4% in the three months to June, after clocking a decade-low annual growth rate of 5.0% in the fiscal year ended March 31.
India Inflation Rises to 7-Month High - WSJ.com
The wholesale price index, the country's main inflation gauge, rose 6.46% from a year earlier, compared with August's 6.10% increase, according to data released Monday by the Ministry of Commerce and Industry.
The reading was higher than the median estimate of 6.00% in a poll of 13 economists by The Wall Street Journal.
The government also revised higher July's inflation reading to 5.85% from 5.79% reported earlier.
Inflation has hovered at levels above the central bank's comfort zone of 5.0% since June, driven by a sharp rise in food prices after heavy rainfall damaged crops in northern India. Regular increases in domestic fuel prices in recent months as a weak rupee pushed up India's import costs have also stoked prices.
Economists say with inflation sustaining at levels the Reserve Bank of India believes aren't tolerable, another increase in monetary policy rates can't be ruled out.
Last month, the RBI surprised markets by raising its main lending rate by a quarter-percentage-point. It will next review monetary policy on Oct. 29.
High interest rates have been an important reason dragging India's growth. The south Asian economy grew 4.4% in the three months to June, after clocking a decade-low annual growth rate of 5.0% in the fiscal year ended March 31.
India Inflation Rises to 7-Month High - WSJ.com
