Indian inflation falls slightly to 7.25 per cent
NEW DELHI: India’s inflation slowed to 7.25 per cent in June from a year earlier, official data showed Monday, but it remained above the central bank’s comfort level, making further rate cuts difficult.
The June reading was below the median forecast of 7.60 per cent in a poll of 18 economists by Dow Jones Newswires and also lower than the reading for May of 7.55 per cent.
The Indian central bank has been under political pressure to cut rates to help spur the slowing economy, but inflation at this level is seen by analysts as too high to drastically reduce the cost of borrowing.
A 22 per cent shortfall in vital monsoon rains is also causing concern about lower farm output, which would increase the cost of food and send inflation spiralling above 10 per cent again.
In the data released Monday by the ministry of commerce and industry, the government raised the April inflation reading to 7.50 per cent from the 7.23 per cent reported earlier.