The IMF is now seriously concerned about the inflation problem in India.
“There’s a risk that inflation is going to stay high in sometime in the future,” according to the IMF’s mission chief in India, Masahiko Takeda. “There’s a possibility further monetary action may be needed to contain the high inflation.”
The IMF is not the first to call for rate rises, and they are largely expected by investors.
India’s food inflation stood at 18.32% as at December 25, a 3.22% jump from the previous week. While onion prices rose 82.47% this year, meat, eggs and fish increased by 20.83% and milk by 19.59%, according to The Times of India.
Besides subsidizing prices, India had begun to rely on Pakistani imports to cool inflation rates. On Thursday though, Pakistan stopped 300 trucks headed to the Wagah-Attari border between the two countries, the Press Trust of India said in a release. The (Pakistani) government of Punjab imposed the ban to offset high prices at home.