India’s inflation to keep steady, growth on track

Indian inflation will remain steady in coming months, despite short-term rises in the prices of certain food items, Finance Minister Nirmala Sitharaman told the Economic Times newspaper in an interview.

Food price inflation rose to 11.5% in July, its highest in more than 3-1/2 years, while India is set to receive its sparsest monsoon rains in eight years, adding to Prime Minister Narendra Modi’s woes in an election year.

But economic growth was likely to be robust at least until the end of the year as India heads into the festive season, when spending typically picks up, Sitharaman said in the interview published on Wednesday.

“Till after the new year, you would have enough reasons to believe that the demand situation is going to only go up,” she said. “So, I expect the next quarter will also do well.”

India is set to release GDP data for the period from April to June on Thursday. Economic growth is projected to touch 7.7%, the fastest annual pace in a year, a Reuters poll showed.

Asked about a report by investor Hindenburg on the Adani group, Sitharaman pointed to the role of short-sellers in fuelling volatility in a stock.

“But what I’m looking at is SEBI, with what it does, is able to see the grain from the chaff,” she said, referring to market regulator the Securities and Exchange Board of India.

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