Food Inflation May Linger Despite Good Monsoon: India Ratings

Mumbai: Despite favourable impact of monsoon, the sharp decline in overall inflation is unlikely in near future, rating agency India Ratings & Research said.

Headline inflation, on y-o-y basis, increased to 6.5 per cent in September 2013 from 6.1 per cent a month ago, led by inflation in primary food products (18.4 per cent) and fuel and power (10.1 per cent).

Even the consumer price index based inflation for September 2013 escalated to 9.84 per cent as compared with 9.54 per cent in August 2013, India Ratings said in a report.

Wholesale inflation in September 2013 increased by 0.36 percentage points over August 2013. Fruits and vegetables, and crude petroleum contributed 71.2 per cent and 21.4 per cent, respectively, to the increase in wholesale inflation in September 2013.

Fruits and vegetables inflation increased to 49.1 per cent in September 2013 from 42.4 per cent in August 2013 and crude petroleum inflation increased to 6.1 per cent in September 2013 from a deflation of 2.5 per cent in August 2013.

Quoting no change in RBI policy stance, India Ratings said that reversal in inflation trajectory has reduced the Reserve Bank's elbow room to ease policy rates.

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