New Delhi: India's consumer prices rose 5.4 percent in April from a year earlier, the statistics ministry said Thursday, a sharper increase than economists had expected, driven up by higher food prices.
The monthly inflation rate was substantially higher than the 4.8 percent recorded in March and exceeded a median 5.05 percent increase forecast by economists in a Bloomberg survey.
It comes after the Reserve Bank of India (RBI) last month cut its key interest rate to a five-year low, citing easing inflation.
In a further blow for Asia's third-largest economy, separate data released Thursday showed industrial output was flat in March, expanding only 0.1 percent year-on-year, well below estimates.
"This inflation number shouldn't be a complete shock to the RBI because we do see intra-quarter variations," Shubhada Rao, chief economist at Yes Bank in Mumbai, told AFP.
"The softness in industrial production was not (anticipated) and to this extent it does provide a mixed picture," she said.
Central bank governor Raghuram Rajan, who has made taming India's once-runaway prices a priority of his tenure, has set a medium-term goal of limiting inflation to 5 percent by March 2017.
The RBI's April rate cut, designed to lower the cost of borrowing and provide a boost to the economy, took the key interest rate to 6.5 percent, its lowest level since early 2011.
Economists are now looking ahead to the imminent monsoon, a key factor in food price inflation owing to its outsize impact on India's farmers, whose crops are highly dependent on the annual rains.
AFP
