India Inflation Quickens More Than Estimatedby
Consumer prices rise 5.39% versus 5.05% survey estimate
Central bank scheduled to review interest rates on June 7
India’s retail inflation accelerated more than estimated, shifting focus to the crucial monsoon season that boosts harvests and helps keep food costs in check.
Consumer prices rose 5.39 percent in April from a year earlier after a 4.83 percent increase in March, the Statistics Ministry said in a statement on Thursday. The median of 35 estimates in a Bloomberg survey of economists had predicted a 5.05 percent gain. Industrial output expanded 0.1 percent in March compared with an estimated 2.5 percent gain.
The June-September rainfall, which waters more than half of India’s farmlands, is forecast to be above-normal this year after two successive droughts. Food prices are a key determinant in whether central bank Governor Raghuram Rajan will achieve his goal of keeping inflation within 5 percent by March 2017.
Rajan will keep rates unchanged at the next review scheduled for June 7, Sonal Varma, a Mumbai-based economist at Nomura Holdings Inc., said by phone after the data. The central bank had lowered the benchmark repurchase rate to a five-year-low of 6.5 percent in April and said it would look for more room to ease as it watches the monsoon rains.
- The consumer food price index rose 6.32 percent in April after a 5.21 gain in March
- The jump was led by a 34 percent surge in pulses
- Health costs increased 5.29 percent, education 5.62 percent, personal care 5.64 percent
The rupee erased gains in the offshore market, with the one-month non-deliverable forward falling to 67.04 a dollar from 66.97 before the data. Local markets had shut earlier.