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Indian inflation eases back in July to 9.22%

India's inflation rate slipped slightly in July to 9.22% from 9.44%.

The fall was mainly due to a fall in food prices, but analysts still expect more interest rate rises to try to keep inflation under control.

Inflation is a major headache for the Indian government and the central bank has raised interest rates 11 times in 18 months to try to keep a lid on it.

Despite this, a senior government adviser has said he thinks inflation will stay between 9-10% this year.

A top adviser to the finance ministry, Kaushik Basu, said he expects headline inflation of that amount until December, reinforcing fears that the Reserve Bank of India will continue to raise rates.

The government is projecting growth of 8.5% for the current fiscal year that ends next March.

But the growth rate is threatened by rising prices which limit domestic consumers' spending power.

A further curb could come from lower export demand, as developed countries struggle with low or no economic growth.

BBC News

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