Indian inflation still up despite oil decline

The recent decline in global oil prices will not lower India's rate of inflation, which should remain stubbornly strong despite monetary tightening by the central bank.

'The recent decline in global oil prices will not help cool consumer price inflation in India because energy prices - subsidised by the government - ...

'Until next June, energy prices will also remain notably higher on a year-ago basis because of the cut in subsidies two months ago,' she said.

'The rise in global commodity and food prices is still a major driver of inflation in India. The retreat of oil will only help ease the pressure on the government to further raise domestic energy prices.

The report said wholesale price growth was expected to peak in this quarter, and there was still a 'reasonable chance' inflation rate would fall below double digits later this year.

India's annual rate of inflation accelerated to a 16-year high to 12.6 percent for the week ended Aug 9th.