New Delhi: India’s inflation accelerated more than expected as floods in various parts of the South Asian nation stoked prices of fruits, tea and other food products.
The wholesale price index gained to 4.45% in the week to 28 July from 4.36% the previous week, the ministry of commerce and industry said in a statement in Delhi on Friday. Analysts had estimated inflation at 4.41%. Food prices rose faster than manufactured products as floods in the country’s northern and eastern regions damaged crops and disrupted supplies.
The Reserve Bank of India (RBI) may keep borrowing costs unchanged as inflation was below its 5% target for the eighth week.
“Inflation has inched up because of higher food costs caused by floods,” said Sujan Hajra, chief economist at Anand Rathi Securities Pvt. Ltd in Mumbai.
“Inflation remains within the central bank’s ceiling and there is no question of further monetary tightening from these levels.”
The index of food articles rose 0.5% in the last week of July, compared with a 0.1% increase in the index of manufactured products, Friday’s report said.
Floods in India caused by monsoon rains have killed 1,428 people, affected 32.9 million and damaged about 2.3 million hectares of farmland, India’s home ministry said in a report this week.
Rains during the four-month monsoon season, which runs from June to September, are vital for the region’s agriculture. This year, they have triggered floods and landslides that have devastated crops and destroyed villages.
The government on Friday revised the inflation rate for the week ended 2 June to 5.09% from 4.80%.
The government revises the inflation rate after a delay of two months on additional price data.