India's August Inflation Exceeds Expectations to Reach 4.82 Percent
India's retail inflation rising to 4.82 percent in August strengthened the likelihood of the central bank implementing a rate hike next month.
India's annual retail inflation accelerated to reach 4.82 percent in August as price pressures spread beyond food and transportation.
August Inflation Figures
According to data released in India, annual retail inflation came in at 4.82 percent in August. This rate remained slightly above economists' expectation of 4.80 percent in a Reuters poll, while also surpassing the 4.45 percent level seen in July.
Increase in Food and Core Inflation
Due to weak monsoon rains and sharp price increases in staple products such as ginger, onions, and garlic, food inflation climbed from 5.52 percent in July to 5.95 percent in August. During the same period, core inflation also rose from 3.86 percent to 4.2 percent.
Central Bank and Interest Rate Expectations
The central bank had kept its benchmark policy rate unchanged at 5.25 percent last month. However, officials, including Governor Sanjay Malhotra, had stated that they were open to a rate hike should inflation pressures persist. Economists view the probability of a rate move at the October meeting as higher.