However, Chief Economic Adviser to the Finance Ministry Kaushik Basu is optimistic that next months inflation number likely to be closer to 7%.
The annual headline inflation in January is seen lower than that in December, Chief Economic Adviser to the Finance Ministry Kaushik Basu said on Friday.
Inflation accelerated in December on costlier food items, cementing expectations for another rate increase by the Reserve Bank of India (RBI) later this month to cool spiralling prices.
The current level of food inflation is not acceptable, Finance Minister Pranab Mukherjee said on Friday, after the headline inflation accelerated in December on higher food prices.
The wholesale price index (WPI) rose an annual 8.43% in December on higher food prices, surpassing forecasts and cementing expectations that the central bank will raise interest rates at its January 25 policy review.
According to Jehangir Aziz of JPMorgan, RBI may lose the plot if it does not act aggressively at this point in time. Aziz said though 25 bps is a given, he is hopeful that RBI may deliver 50 bps rate hike.
Speaking to CNBC-TV18, Leif Eskesen, chief economist for India and ASEAN at HSBC said there is a technical explanation behind the IIP blip. He confirmed that the overall momentum in the economy remained strong.
The December inflation numbers has come in at 8.43% compared to 7.48% on a month-on-month (MoM) basis.
HDFC Chairman Deepak Parekh says that while higher rates are not the favoured option at this point, the Reserve Bank of India’s hands are tied given the inflation scenario.
In an interview with CNBC-TV18, Shanto Ghosh, Principal Economist, Deloitte India gave his perspective on the government’s measures to tame inflation.
"I’m trying to get a better sense of some of the causes of inflation myself, but my preliminary read of the situation is that it’s caused more by bottlenecks on the supply side than it is by overly strong demand, said World Bank President Robert Zoellick.
Maritime piracy costs the global economy between USD 7 and USD 12 bn a year, researchers said on Thursday, with Somali piracy in particular driving up the cost of shipping through the Indian Ocean.
Onion prices dropped nearly 16% on Thursday as supplies surged in the new arrivals season and raids by the income tax officials deterred hoarding by traders, two dealers told Reuters.
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Food inflation eased marginally from a one-year peak, but remained high enough to keep pressure on annual headline inflation in December and reinforce expectations of an interest rate rise this month.
Finance Minister Pranab Mukherjee said on Thursday there is no need for unnecessary panic on inflation.
Food inflation eased marginally from a year high but stayed at levels enough to keep pressure on annual headline inflation in December and reinforce expectations of a rates hike by the central bank.
The food price index rose 16.91% and the fuel price index climbed 11.53% in the year to January 1, government data on Thursday showed.
Sonal Varma, Nomura India says, the extent of decline in November IIP numbers is surprising. However, she wouldn’t read that as a big collapse in economic activity. Economic activity is in a consolidation phase, she adds.
There was disappointing news from the macroeconomy. Industrial growth plunged to an 18-month low of 2.7% in November against the 10.8% clocked in October.
Industrial growth plunged to an 18-month low of 2.7% in November against the 10.8% clocked in October. Finance Minister, Pranab Mukherjee has promised corrective action to push up industrial growth.
Indian banks' credit growth till December 31 was at 24.42% on year to Rs 37.63 lakh crore and that of deposits was 16.46% to Rs 49.71 lakh crore, the Reserve Bank of India (RBI) said on Wednesday.
Difficulties in securing funding will delay the ONGC's deal to invest in Iran's South Pars Phase 12 gas project, as global pressure on Tehran grows over its nuclear programme.
The government expects a dispute with Iran over payment for crude oil to be settled as early as next week, ending a deadlock that has threatened to stall supplies from the Middle Eastern nation.
Food inflation is fuelling tensions within India's ruling coalition, highlighting how high prices of basic foodstuffs have become a major voter issue ahead of state elections.