NEW DELHI: It is too soon to consider a policy response to a surprise slowing of India's inflation in July, central bank Deputy Governor Subir Gokarn said on Thursday, while warning that rising global crude prices were a risk to inflation.
India's Wholesale Price Index rose by 6.87 percent in July, below consensus forecasts, but concerns remained about high core inflation and an ongoing drought.
Gokarn added that India needed to follow a path of fiscal consolidation if it wanted to avoid a downgrade of its sovereign debt rating.
Global ratings agencies Fitch and Standard & Poor's have warned that India could lose its investment-grade debt rating if steps such as cutting fuel subsidies are not taken to narrow the fiscal deficit.
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