Retail enlargement in India fell to less than 7% for the first time within three months, thanks to a more tight monetary policy and calm the prices of global basic commodities. The consumer price index for October increased by 6. 77% from the previous year, compared to 7. 4% in September, according to data issued by the Indian Ministry of Statistics on Monday.
This is in line with the estimate of 6. 7% in the Bloomberg poll.
While this provides some comfort to the Indian Reserve Bank, it is not enough to force the central bank to consider stopping interest rate increases so far.
Indeed, the Federal Reserve Bank, which met earlier this month to review the reasons that led to its failure to prevent inflation from penetrating its target scope of 2% to 6% for three consecutive quarters, is expected to return price gains to the goal by March, and it is likely that it is likely The central bank is moving forward with tightening its monetary policy next month.
“With inflation remains above 6%, the Indian Central Bank cannot stop raising interest rates at the present time,” said Rahul Pagoria, an Indian economist at Barclays Bank, “but with many price indicators that appear in momentum, The volume of price increases can be reduced. ”
The data issued earlier on Monday showed that wholesale prices have decreased to unilateral numbers for the first time in 19 months, and food prices, which constitute nearly half of the index, increased by 7.
01%, as non -seasonal rain hit crops, as Fuel and lighting prices, which weighing 7. 9% in the total consumer price index, increased by 9. 93%.
Adity Nayyar, an economist at ICRA LTD, said, “The future inflation expectations are tainted by some risks such as the last series of global commodity prices, and the offer is disrupted for damaged materials due to excess rain and strong demand for services.
”
She said that the Indian Reserve Bank may choose to raise the interest rate by 35 basis points in December, compared to the previous three increases of 50 basis points for each.
As for the basic non -food and non -oil inflation, whose weight was a painful point for interest rates in India, it reached 6. 23%, the prices of clothes and shoes increased by 10. 16%, and housing prices increased by 4. 58%during the month on an annual basis.
Since May, the Indian Central Bank raised the standard interest rate by 190 basis points to 5. 90%. Economists in Goldman Sachs Group expect the rate to rise to 6. 75% by February..
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