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India inflation hits double digits in August
Rising food prices pushed CPI inflation to 10%.
According to BBVA, India's CPI inflation edged higher to 10.0%y/y in August from 9.9% in July, driven by rising food prices. Last week, the more closely watched benchmark WPI inflation outturn for August showed a jump in inflation to 7.6% y/y from 6.9% previously, suggesting persistent price pressures, particularly with respect to commodities.
"Even after the RBI’s decision yesterday to leave interest rates unchanged in view of the persistent inflationary pressures, we still expect another 50 bps of interest rate cuts over the rest of 2012 amid rising growth concerns and recent positive steps toward policy reforms," BBVA said.
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