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| India's inflation holds steady at over 12 pct |
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Time is GMT + 8 hours
Posted: 26-Sep-2008 02:08 hrs |
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| An Indian couple with their children step out of a shopping mall in Kolkata, in August 2008. India's inflation rate held steady above the 12 percent mark, official data showed Thursday, as the government forecast the rate would stay at double-digit levels until at least January. |
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India's inflation rate held steady above the 12 percent mark, official data showed Thursday, as the government forecast the rate would stay at double-digit levels until at least January.. Annual inflation was 12.14 percent for the week ended September 13, unchanged from the previous week, according to the Wholesale Price Index, India's most watched cost-of-living monitor.. The figure was still far above the central bank's target of seven percent for the fiscal year to March 31, 2009, but below market expectations that inflation would accelerate to 12.23 percent.. The government's chief statistician, Pronab Sen, forecast "inflation will stay in double digits due to the (low) base effect till January before easing. "The inflation we're seeing is the second-round effect of oil and steel (prices).". Inflation, stoked by a rise in energy, food and other commodity prices, has nearly tripled from a year ago and is now at its highest levels since the current inflation series began being compiled 13 years ago.. Stubborn inflation is a key worry for the Congress-led government, which fears a voter backlash in elections due by May 2009 from India's masses who have been hardest hit by the price rises.. At the same time it fears aggressive monetary tightening by the central bank could brake economic growth too sharply and hurt efforts to ease poverty.. Analysts were divided over whether the central bank would tighten monetary policy again to tame inflation before gradually starting to loosen interest rates.. Crisil Principal Economist Dharma Kriti Joshi forecast another quarter-point hike in the bank's benchmark short-term lending rate would be announced at its next monetary policy meeting, on October 24.. The rate is at a seven-year high of nine percent.. But Rajeev Malik, economist at Macquarie Group, said he expected the Reserve Bank of India (RBI) to keep rates on hold, citing global economic turmoil.. "The ongoing global financial stress... will likely prompt the RBI to maintain the status quo on rates," he said in a note to clients. — AFP
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