New Delhi, Oct 12: India’s retail inflation accelerated to 7.41 per cent in September from a year ago on higher food and energy costs, the highest since April and above the upper end of the RBI’s 2-6 per cent tolerance band in each month this year.
Data released by the National Statistics Office showed consumer price index-based inflation (CPI) in September rising to 7.41 per cent from a year ago, compared to August’s 7 per cent.
The latest reading will pressure the RBI to accelerate policy tightening further, even at the cost of the economy, after raising its key repo rate to a three-year high of 5.9 per cent in four increments this year to tame surging prices.
That suggests the central bank would need to act more aggressively and mirror the policy path of major central banks in the West — fight inflation at any cost, including a recession — despite RBI Governor Shaktikanta Das’ statement last month that the policy was aimed to control inflation while minimising any impact on economic growth.
Food inflation, which accounts for nearly half the consumer price index (CPI) basket, soared as prices of essential crops like wheat, rice and pulses – squeezing already stretched household budgets further.
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