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By Ed Frankl
India’s annual inflation climbed for the second month in a row, above the country’s central bank target range, after food prices surged.
Consumer prices rose 7.44% in July compared with the same month a year earlier, accelerating from the upwardly revised 4.87% on-year increase in June, according to government preliminary data published Monday.
The reading was above a consensus forecast of economists polled by FactSet, which predicted the rate to tick up to 6.9%. The rise comes two months after May’s 25-month low of 4.31%.
The rate also misses the Reserve Bank of India’s target of 2% to 6% for the first time since February.
It comes as food and beverages prices–which make up the bulk of the consumer price index–increased 10.57% on year in July, considerably higher than the 4.63% reported in June.
The reading could propel policymakers at the central bank to raise interest rates in an effort to calm inflation, after it kept its benchmark rate at 6.5% last week.
However, clothing-and-footwear inflation was 5.64% in July, while for fuel and light it was 3.67%, with both cooling from June’s measures, according to the data.
Write to Ed Frankl at [email protected]
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