Tomahto, Tomayto – Soaring Prices, Government In Denial
Surging food prices have had a domino effect, materially changing India’s inflation outlook. India’s retail inflation rose to 7.4% year-on-year in July, surpassing the upper limit of Reserve Bank of India (RBI)’s tolerance band of 6%. This trend has led to the RBI upwardly revising India’s Consumer Price Index inflation rate for the year from 5.1% to 5.4%. The RBI Governor has even warned that policymakers will have to stand ready to go beyond keeping a watchful eye, and deploy policy instruments if necessary.