Rising food prices push Sept CPI up to 4.4 %

A rise in some food prices lifted Indian retail inflation in September after it had hit a record low in the previous month, but inflation is expected to remain low thanks to falling global commodity prices.

Poor monsoon rains have led to drought in some parts of the country for the second straight year, forcing up prices for popular staples such as pulses and vegetables.

Retail inflation, which the Reserve Bank of India (RBI) tracks to set interest rates, rose to 4.41 percent in September from a revised 3.74 percent in August, data released by the Ministry of Statistics on Monday showed.

Retail food inflation for September came in at 3.88 percent, higher than a provisional 2.20 percent in August.

The governor of the RBI, Raghuram Rajan, cut the policy interest rate last month to a 4-1/2-year low of 6.75 percent to support an economic recovery that is not strong enough to create jobs for India’s burgeoning workforce.

The RBI cut its growth forecast to 7.4 percent for the fiscal year to end March, well below the government’s initial target of 8.1-8.5 percent, but still faster than China.

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Source:Reuters

Inflation