India’s consumer-price inflation quickened more than economists estimated, adding pressure on central bank Governor Raghuram Rajan to keep interest rates elevated even after factory output slowed.
The consumer-price index rose 7.96 percent in July from a year earlier, compared with a revised 7.46 percent in June, the Statistics Ministry said in New Delhi yesterday. The median estimate in a Bloomberg News survey of 43 analysts was for a 7.4 percent increase. Industrial production rose 3.4 percent in June compared with a 5.6 percent gain predicted in a separate survey and a revised 5 percent in May.
Finance Minister Arun Jaitley backed Rajan’s Aug. 5 decision to keep the benchmark rate unchanged at 8 percent for a third meeting as below-normal rainfall threatens to stoke Asia’s fastest inflation. The highest borrowing costs among the region’s largest economies risk damping growth that’s essential to narrow the budget deficit to a seven-year-low.
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