Inflation for food remained a persistently high 15.7
percent, while it was 11.1 percent for fuel and power and 4.6 percent for
manufactured goods, government data released Friday showed.
The government also revised July inflation to 10.3 percent
from a provisional 10.0 percent.
Citigroup economist Rohini Malkani said in a research note
that she expects inflation to moderate to 6 percent by year end, thanks to a
high base effect.
But structural drivers of price rises, like growing incomes,
changing diets and stagnant crop yields, plus a possible rally in global
commodities prices are concerns, she said.
“Given trends in growth, credit and inflation, we maintain our
view of the RBI hiking once or possibly twice by fiscal year end,” she said.
But she added that global developments - like the
expectation that the US and Japan will buy government bonds and other assets to
lower interest rates and drive down their currencies - and measures taken by
many central banks to temper surging capital flows could cause the Reserve Bank
of India to “wait and watch” on rates at its Nov. 2 meeting.
