Rising onion costs send India inflation to 7-month high
MUMBAI (AFP) - A four-fold surge in the cost of onions helped push Indian inflation to a seven-month-high last month, fuelling expectations of another interest rate hike as the authorities struggle to get the economy back on track.
The wholesale price index hit 6.46 per cent last month from 6.10 per cent in August - and much higher than analyst forecasts of 6 per cent - driven by surging vegetable and fuel prices.
"Rising input costs have pushed up core inflation," said Bank of Baroda economist Rupa Rege Nitsure.
The scandal-tainted Congress-led government of Prime Minister Manmohan Singh is anxious to tame inflation and revive the economy as it seeks a third term in office with elections due by May next year. The main driver of the surge in inflation was vegetable prices, which rose 18.4 per cent year-on-year, while the cost of onions, regarded as cooking essential, increased 322 per cent owing to a supply shortage. Fuel prices jumped 10 per cent.