India’s inflation surges to 8-month high on soaring food prices

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India’s inflation surges to 8-month high on soaring food prices

2:53 CAT | 14 Mar 2022

FILE PHOTO - Consumer prices in India rose 6.1 percent last month from a year earlier, faster than what economists had predicted [File photo: Anindito Mukherjee/Bloomberg]

Things are likely to get worse for India amid commodity-supply disruptions caused by Russia’s war in Ukraine.

India’s headline inflation surged to an eight-month high in February on higher food prices, with the outlook set to worsen amid commodity-supply disruptions caused by Russia’s war in Ukraine.

Consumer prices rose 6.1% last month from a year earlier, the Statistics Ministry said in a statement Monday. That’s faster than the median estimate for a 6% gain seen in a Bloomberg survey of economists and well above the upper end of the Reserve Bank of India’s inflation target band.

The war-fueled uncertainty is likely to force the central bank to revisit its inflation and growth forecasts at its policy meeting next month. Although, it’s unlikely to force the RBI to tighten interest rates just yet, given policy makers’ are intent on supporting the economy’s durable recovery.

Digging Deeper

Rising costs of food and clothing and footwear contributed to the price growth last month, data showed. Food prices jumped 5.9%, clothing and footwear prices gained 8.9% and housing prices climbed 3.6%. Fuel and electricity prices rose 8.7%, slower than the 9.3% pace seen in January

Pump prices have been frozen for more than four months coinciding with elections in some key Indian states. That could change if fuel retailers start passing on higher crude prices caused by Russia’s war