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Rising food prices push India's December retail to 17-month high

Reuters  |  NEW DELHI 

By Kumar

(Reuters) - Rising pushed India's retail to a 17-month high in December, breaching the central bank's medium-term target for the second straight month, which could intensify pressure for it to raise policy rates in the next few months.

India's measure of consumer price inflation, the index, rose 5.21 percent in December from a year earlier, the said on Friday.

Analysts polled by had predicted December's consumer rate would climb to 5.10 percent, the highest since July 2016, from 4.88 percent in November.

Annual retail food rose 4.96 percent in December from 4.35 percent in the previous month.

The Reserve of held its policy rate steady at 6.0 percent last month and said all possibilities were on the table, depending on how price pressures and growth panned out.

The RBI, which has a medium-term target of 4 percent, has raised its estimate to 4.3 percent to 4.7 percent for the six months through March. But some analysts feel could overshoot its estimates.

The RBI holds its next policy review on Feb. 7.

Sunil Sinha, at Ratings, said the RBI was unlikely to change its policy stance soon.

"If the pressure continues beyond this level, one can expect the central to change its policy stance to hawkish," he said.

Rising amid is a major worry for ahead of his last full-year budget, due on Feb. 1, as he hopes to win a second term in 2019.

Analysts said any sharp rise in state spending in the budget that fuels could force the central to raise rates earlier than expected.

The U.S. central is forecasting three rate hikes for 2018. It raised rates three times last year.

While the world's seventh largest is expected to grow at 6.5 percent in the current fiscal year ending in March, a continued rise in from 1.46 percent in June, the lowest on record since 2012, has alarmed policymakers in

Crude prices have rallied, sending Brent crude above $70 a barrel on Thursday for the first time since December 2014, a worry that imports most of its

Despite a cut in taxes, have risen 5.6 percent and diesel by 9 percent since June in the Indian capital.

(Reporting by Kumar; Editing by and Clarence Fernandez)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, January 12 2018. 18:20 IST