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Indian Inflation Quickens Less Than Expected

Indian retail inflation accelerated less than economists predicted and factory output grew before central bank Governor Raghuram Rajan reviews interest rates next month and the government presents its annual budget.

Consumer prices rose 5 percent in December from a year earlier, the Statistics Ministry in New Delhi said yesterday. That compared with November’s 4.38 percent that was the slowest since the index was created in January 2012. The median of 40 estimates in a Bloomberg survey of economists had been for a 5.35 percent gain. Industrial production rose 3.8 percent in November. That compared with a 2.3 percent predicted gain, after output shrank 4.2 percent in the previous month.

Rajan held the benchmark rate unchanged for a fifth meeting in December after Finance Minister Arun Jaitley called for lower borrowing costs. Rajan has indicated that he may ease policy early this year, depending on the pace of disinflation continuing, expectations about price pressures being lowered and the government meeting its budget goals.

Bloomberg [1]

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