New Delhi: India’s food inflation rose for the fourth straight week in early February, heightening worries that it was driving up headline inflation past official forecasts and increasing the chance of the central bank pushing up rates.
The food price index rose 17.97% in the 12 months to 6 February, higher than an annual rise of 17.94% in the previous week, data released on Thursday showed.
A persistent rise in food and fuel prices along with a pick up in manufacturing prices are expected to push headline inflation from 8.56% in January to 10% by March, according to analysts and India’s chief statistician Pronab Sen.
However, RBI governor D. Subbarao said in Patna on Thursday that the central bank sticks to its projection of inflation standing at 8.5% by the end of the current fiscal, implying that the rate of price rise will in fact decline in the next two months. “Monitoring inflation is a continuous process. We still stand by that inflation will be at 8.5%, as projected, by March 2010,” he told reporters
The wholesale price inflation has already leapt over the central bank’s revised end-March inflation forecast of 8.5%.
PTI contributed to this story.