Accelerating consumer inflation dashes policy easing hopes

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Accelerating consumer inflation dashes policy easing hopes
India's consumer inflation rose at the fastest pace in three months in April 2014 as prices of food items continued the upward journey, dashing any hopes of an interest rate cut by the Reserve Bank of India (RBI) in the near-term, clouding the outlook for Asia's third biggest economy, which has grown below the 5 per cent mark for the past few quarters.

The consumer price index rose by 8.59 per cent in April 2014 from the same month a year ago, government data showed on Monday.

In March 2014, the retail inflation index rose by 8.31 per cent over the same month a year ago.

The RBI is aiming to keep inflation at 8 per cent by January 2015.

Food inflation rose to 9.66 per cent in April 2014 from 9.1 per cent in March 2014 driven by a surge in prices of vegetables and fruits which rose by 17.5 per cent and 21.73 per cent, respectively, in April 2014 over the same month a year ago.

The common man remains squeezed by rising retail prices, leaving little room for discretionary spending.

The RBI, which will meet on June 1, is unlikely to ease monetary policy amid accelerating inflationary pressures.

Read more about: inflation
Story first published: Tuesday, May 13, 2014, 12:50 [IST]
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