|
The
pick-up in inflation rate, mainly driven by rising food prices,
adds to the challenges for Prime Minister Narendra Modi, who is
trying to revive slowing economic growth amid student protests
against a controversial new citizenship law that critics say is
discriminatory against Muslims.
Finance Minister Nirmala Sitharaman will present the annual
budget for 2020/21 on Feb. 1, and is widely expected to increase
spending on infrastructure and cut taxes, which some economists
fear could further fuel prices.
The Reserve Bank of India (RBI) will hold its next policy review
from Feb. 4 to 6.
Annual retail inflation <INCPIY=ECI> in December remained above
the RBI's medium-target of 4% for the third straight month, and
also above the 5.54% posted in November and higher than the
6.20% forecast in a Reuters poll of economists.
Retail inflation had touched 7.39% in July 2014, according to
Refinitiv data.
Retail food prices, which make up nearly half of the India's
inflation basket, increased 14.12% in December from a year
earlier, against 10.01% in November. Some vegetable prices,
including prices of onions that are a staple in Indian cooking,
have increased more than four-fold since June.
The RBI cut its policy repo rate <INREPO=ECI> by 135 basis
points last year before holding in December, while warning
against rising inflationary pressures. Meanwhile the government
and central government have downwardly revised growth forecasts
to an 11-year low of 5% for the current fiscal year ending in
March.
(Reporting by Aftab Ahmed and Manoj Kumar; Editing by Alex
Richardson)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
