Inflation Likely To Fringe Higher In India

In spite of the Meteorological Department's prediction that the monsoon for the year 2018, is likely to be normal, bringing in the new hope amongst the farm community about the brighter chances of recovery from the farm sector which has witnessed fluctuation in growth rates in the recent past. The uneven distribution of the rainfall across the country is likely to soar food prices, and the inflation is likely to edge further.

Currently, the rising fuel prices in India, which has seen an all-time high of $80 per barrel, is likely to feed into other segments and keep the rate of inflation higher. India is 80 percent dependent on foreign imports to meet its oil needs.

The Dun & Bradstreet - a commercial and professional services firm, expects the Consumer Price Index (CPI) inflation to be in the range of 4.6% - 4.7% and the Wholesale Price Index (WPI) inflation to record around 3.6% - 3.8% this month.

The policymakers have to consider the spatial distribution of rainfall and monitor the same before setting up the firm expectations since the uneven distribution of rainfall can blaze up food inflation in the country.

Inflation is a key rate at which the general level of prices for goods and services in a country rises. The country's Central Bank - RBI generally attempts to limit the level of inflation and avoid deflation, in order to keep the economy smooth and stable.

The rate of inflation also depends on other factors like - geopolitical risks, volatility in crude oil price in international market, depreciating value of rupee, escalating tension in global trade, rising value of U.S. dollar and so on.