INDIA: Food inflation drops to single digits for the first time this year

Food price inflation dropped to single digit 9.67% for the first time this year, even as the government continues to face a concerted Opposition attack on rising food and fuel prices.

The data is, however, unlikely to alter RBI’s hawkish stance, which has firmly shifted its policy focus to containing double-digit inflation and cooling inflationary expectations.

The deadlock in Parliament over the rising prices of essential commodities continued with a determined Opposition stalling both Houses for the third working day of the monsoon session.

Led by cheaper cereals, rice and vegetables, the annual rate of inflation in the food price index fell to 9.67% in the week ended July 17, as compared to 12.47% in the previous week, official data released on Thursday showed.

The Reserve Bank of India in its policy review on Tuesday hiked key interest rates for the fourth time this year. Worried that the higher food prices have transferred into core inflation, it also upwardly revised its projection for headline inflation to 6% by March end.

Read more at The Economic Times