India's August retail inflation at 4.82% on-year

NEW DELHI: India’s annual retail inflation jumped to 4.82% in August from 4.45% in July, driven by higher food and fuel prices and strengthening a case for an interest rate hike in October.

The August print is marginally higher than a 4.80% inflation that the economists were expecting in a Reuters polland marking a third straight month when it was above the Reserve Bank of India’s 4% medium-term target.

The central bank left its benchmark policy rate unchanged at 5.25% last month, but minutes of its last monetary policy meeting showed that some RBI officials, including Governor Sanjay Malhotra, favoured a rate hike if inflation spread across segments.

The rate-hike concerns have intensified over the past month as a sustained rise in global oil prices threatens to add to inflation pressures, with Brent crude futures near $108 a barrel.

India July inflation accelerates to 4.45%, unlikely to alter RBI rate outlook

India imports nearly 85% of its oil needs, more than half of it from the Middle East, where the U.S.-Iran war has caused major supply disruptions.

Still, Asia’s third-largest economy continues to be an outlier among regional peers such as Indonesia and the Philippines that have raised rates in response to higher energy prices and currency volatility.

India’s food inflation climbed to 5.95% in August from 5.52%in July, on the back of weak monsoon showers, with sharp increases in prices of staples such as ginger, onion and garlic.

Transport inflation accelerated to 4.60% in August from 4.43% in the previous month.