MUMBAI (Reuters) - India's consumer price inflation accelerated to a two-month high of 7.96 percent in July, driven up by surging prices for vegetables, fruit and milk, government data showed on Tuesday.
A Reuters poll had forecast the consumer price inflation rate would edge up to 7.4 percent from 7.31 percent in June.
COMMENTARY:
RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI
"Vegetable prices had increased by more than 35 percent in July on a month-on-month basis, which was much higher than the average increase over the last five years, so this uptick in CPI was expected.
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The trajectory of higher food inflation always gets translated to higher core numbers with a gap of 5-8 weeks.
Given than the RBI is committed to anchoring inflation expectations in a meaningful manner, the possibility of commencement of easing in this financial year is ruled out.
I don't think we will see any hikes in interest rates as well as globally interest rates are very low and thus, prolonged pause is the only the option with the RBI. They will, however, continue with growth supporting measures through other channels like giving banks more liquidity."
ANEESH SRIVASTAVA, CHIEF INVESTMENT OFFICER, IDBI FEDERAL LIFE INSURANCE, MUMBAI
"Core inflation has not moved at all, while CPI has increased mostly because of higher vegetable and food prices.
Although it looks seasonal, it is a negative for equities alongside weak factory output. It is very difficult to say what will happen in August due to the backdrop of a weak monsoon.
Our view is inflation should head lower in the next three to six months. RBI will continue to remain cautious."
UPASNA BHARDWAJ, ECONOMIST, ING VYSYA BANK, MUMBAI
"Inflation came in line with our expectations, led primarily by surge in fruits and vegetables. Though we expect the progress in rains and sowings to ease some pressure on food prices in the months ahead, RBI is likely to remain cautious and keep the policy rate unchanged."
(Reporting by Mumbai markets team)