- POSTED: 16 Dec 2013 18:53
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India's inflation jumped to a 14-month-high of 7.52 per cent in November, data showed on Monday, stoking expectations of another interest rate hike when the central bank meets this week.
MUMBAI: India's inflation jumped to a 14-month-high of 7.52 per cent in November, data showed on Monday, stoking expectations of another interest rate hike when the central bank meets this week.
The Wholesale Price Index, India's most closely watched inflation indicator, was up from 7.0 per cent in October, led by food prices, which rose nearly 20 per cent from a year earlier.
The index is now the highest since September 2012 and spells more bad news for the government as it struggles to jumpstart sluggish economic growth ahead of general elections due by May.
Among food costs, vegetable prices surged 95 per cent while onion prices soared by 190 per cent, Department of Commerce data showed.
Rising food costs also pushed up consumer price inflation, which jumped in November to a higher-than-expected 11.24 per cent, figures released last week showed.
Inflation for September was also revised higher to 7.05 per cent from a previously reported 6.46 per cent, the figures on Monday showed.
Government and business leaders have urged the Reserve Bank of India (RBI) to start cutting interest rates to help boost growth, which has slumped to a decade-low.
But economists expect the RBI to again hike interest rates when it meets on Wednesday, in an effort to tame stubbornly high inflation.
"Given the momentum of inflation, a 25 basis points hike in rates is (a) given," said Shubhada Rao, chief economist with private Yes Bank.
The RBI has raised rates in September and October under new governor Raghuram Rajan who has signalled his intention to wrestle down inflation which has been above the RBI's comfort levels for years.
Rajan last week said the bank was "very uncomfortable" with the inflation level but added growth was also "weaker than we would like".