Food Prices May Cool, RBI Rate Cut Unlikely: Experts

Experts and industry said kharif sowing trends indicate cooling of food inflation in the coming months, even as chances of a rate cut in the near-term are low, given the rise in wholesale and retail inflation.



Wholesale inflation (based on the Wholesale Price Index) soared to a 23-month high of 3.55 per cent in July as vegetables, pulses and sugar turned costlier. (Read more)



However, the rise in prices may provide partial relief to manufacturers and producers, although it brings bad news for household budgets of consumers, warranting redressal of the issues arising out of demand-supply mismatch.

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Assocham cautioned that a further increase in WPI inflation may push consumer price inflation which is likely to hit households and final consumers badly, observing that India was now in need of "strong actions" from the government to address structural issues of demand and supply within the industry.