New Delhi:
India’s headline inflation in July fell to 6.87 per cent, much lower than projections.
The inflation rate, measured by the Wholesale Price Index, is lower than a Thomson Reuters poll of 24 experts, whose median projection was as high as 7.37 per cent. Inflation in June 2012 was 7.25 per cent and in May at 7.55 per cent. April inflation was revised upwards from 7.23 per cent to 7.5 per cent.
Forecasts in the Reuters poll were in a tight range from 6.90 per cent to 7.59 per cent, the narrowest in polls taken since January.
A below-average monsoon, which is vital for over half of India's farmland, is pushing up food prices. Along with fuel, this makes up over a third of the wholesale price index.
Food inflation continued to drive the headline number, growing at a 10.06 per cent against 10.81 per cent in June, marginally lower than the 10.74 in May. Primary articles group, which has a 20.12 weightage and includes food, non-food and minerals groups, came in at 10.39 per cent.
A weaker-than-normal monsoon could result in a possible shortfall in harvest that could contribute to the continuing rise in food prices. India has a significant stockpile of foodgrains and cereals, but is hobbled by a weak storage and distribution system that often causes grains to rot instead of reaching the intended recipients.
Fuel and power inflation, which contributes 14.91 per cent to the WPI, fell to 5.89 per cent due to a drop in oil prices.
Manufactured products, which carry a 64.97 per cent weightage in the WPI, rose 5.58 per cent against 5.02 per cent in June and May. Fuel group inflation fell sharply to 5.98 per cent from 10.27 per cent in June and 11.53 per cent in May 2012.
Persistently high inflation has kept the RBI from lowering its interest rate even though growth in Asia's third largest economy slowed to its lowest in nine years in the quarter to March.
A headline inflation rate of around 5 per cent is seen as the Reserve Bank of India's comfort level, but it has stayed above that for over two-and-a-half years now.
Last month, the central bank kept its key repo rate unchanged at 8 per cent, citing risks to inflation even though economic conditions are deteriorating.
The inflation rate, measured by the Wholesale Price Index, is lower than a Thomson Reuters poll of 24 experts, whose median projection was as high as 7.37 per cent. Inflation in June 2012 was 7.25 per cent and in May at 7.55 per cent. April inflation was revised upwards from 7.23 per cent to 7.5 per cent.
Forecasts in the Reuters poll were in a tight range from 6.90 per cent to 7.59 per cent, the narrowest in polls taken since January.
A below-average monsoon, which is vital for over half of India's farmland, is pushing up food prices. Along with fuel, this makes up over a third of the wholesale price index.
Food inflation continued to drive the headline number, growing at a 10.06 per cent against 10.81 per cent in June, marginally lower than the 10.74 in May. Primary articles group, which has a 20.12 weightage and includes food, non-food and minerals groups, came in at 10.39 per cent.
A weaker-than-normal monsoon could result in a possible shortfall in harvest that could contribute to the continuing rise in food prices. India has a significant stockpile of foodgrains and cereals, but is hobbled by a weak storage and distribution system that often causes grains to rot instead of reaching the intended recipients.
Fuel and power inflation, which contributes 14.91 per cent to the WPI, fell to 5.89 per cent due to a drop in oil prices.
Manufactured products, which carry a 64.97 per cent weightage in the WPI, rose 5.58 per cent against 5.02 per cent in June and May. Fuel group inflation fell sharply to 5.98 per cent from 10.27 per cent in June and 11.53 per cent in May 2012.
Persistently high inflation has kept the RBI from lowering its interest rate even though growth in Asia's third largest economy slowed to its lowest in nine years in the quarter to March.
A headline inflation rate of around 5 per cent is seen as the Reserve Bank of India's comfort level, but it has stayed above that for over two-and-a-half years now.
Last month, the central bank kept its key repo rate unchanged at 8 per cent, citing risks to inflation even though economic conditions are deteriorating.
