logo |

News

    Home   >     Industry    >     Main body

    Pricey Haircuts Seen Messing Up Indias Retail Inflation Outlook

    Abstract:Rising cost of services offered by hair stylists to security guards are a new challenge for Indias monetary policy makers, who stand ready to resume interest-rate cuts as soon as the food-price driven spike in inflation wears off.

      Rising cost of services offered by hair stylists to security guards are a new challenge for Indias monetary policy makers, who stand ready to resume interest-rate cuts as soon as the food-price driven spike in inflation wears off.

      Services inflation surged to 4.8% in September from a year ago, compared with 4.4% in February before the coronavirus outbreak, according to estimates by Citigroup Inc. The pickup reflects cost-push factors associated with the pandemic, such as social distancing and screening of customers, as well as fewer workers in urban centers after migrating back home during the nationwide lockdown.

      “While the increase is not much, directional movement is rather counter intuitive since services inflation is mostly synchronous to the demand cycle,” Samiran Chakraborty, chief India economist at Citi, wrote in a report last week.

      That complicates the central banks inflation outlook, which forecasts overall consumer-price growth to slow to 5.4% in the three months to December from about 7% last quarter. While the estimate relies largely on food prices coming off the boil and supply chains being restored, latest trends show vegetable prices remained stubbornly high and supply lines are yet to be mended.

      A spike in inflation was the main reason for the central bank to halt its policy easing after delivering 115 basis points of rate cuts this year. The Monetary Policy Committee, however, decided to look through the current inflation hump as transient and retained an accommodative stance this month to support an economy headed for its worst annual contraction.

      “Unprecedented inflation fee” is how Sanjiv Mehta, the chairman and managing director of the local unit of Unilever Plc, described the commodities cost for the personal-care products and processed-food maker. “We believe the inflation in select categories is likely to continue in the near-term,” he said Tuesday.

      Clues for whether sticky price pressures could keep policy makers on pause for longer will be available when the minutes of the MPCs latest meeting are published Friday. Three of the six-member rate panel were appointed this month and are seen by many economists as more dovish than the previous members.

      “The current growth-inflation assessment seems to suggest that the MPC would like to stay on a long pause,” Citis Chakraborty wrote. “Sluggish growth momentum would force the MPC to keep rates low while fear of inflation might not let them cut any further.”

    Latest News

    United Arab Emirates Dirham

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand

    United States Dollar

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand
    Current Rate  :
    --
    Amount
    United Arab Emirates Dirham
    Available
    -- United States Dollar
    Risk Warning

    The Database of WikiFX comes from the official regulatory authorities , such as the FCA, ASIC, etc. The published content is also based on fairness, objectivity and fact. WikiFX doesn't ask for PR fees, advertising fees, ranking fees, data cleaning fees and other illogical fees. WikiFX will do its utmost to maintain the consistency and synchronization of database with authoritative data sources such as regulatory authorities, but does not guarantee the data to be up to date consistently.

    Given the complexity of forex industry, some brokers are issued legal licenses by cheating regulation institutes. If the data published by WikiFX are not in accordance with the fact, please click "Complaints "and "Correction" to inform us. We will check immediately and release the results.

    Foreign exchange, precious metals and over-the-counter (OTC) contracts are leveraged products, which have high risks and may lead to losses of your investment principal. Please invest rationally.

    Special Note, the content of the Wikifx site is for information purposes only and should not be construed as investment advice. The Forex broker is chosen by the client. The client understands and takes into account all risks arising with Forex trading is not relevant with WikiFX, the client should bear full responsibility for their consequences.