Rising Gold and Oil Imports Push India’s Inflation to 13-Month Peak: SBI Report

ENA Economy 2024-10-17 17:22:44 New Delhi, Oct 17 (KNN) India's imported inflation surged to a 13-month high in September 2024, growing by 2 per cent, according to a report released by the State Bank of India (SBI). The report warned that imported inflation is increasingly contributing to the country's overall inflation, posing new challenges for the economy. Imported inflation refers to the rise in domestic prices due to the higher cost of imported goods and services. The report highlighted that surging prices of gold, oils and fats, and chemical products are driving this increase. The share of imported inflation in the overall inflation has risen significantly. At 2 per cent growth in September, this is the highest figure recorded in the past 13 months, SBIs analysis noted. One of the primary factors behind the rising imported inflation is Indias spike in gold imports. Recent trade data shows that India imported gold worth USD 10.06 billion in September 2024, more than doubling from USD 4.94 billion in the same month last year. This surge marks the highest gold import value for the January-September period this year. The trend has been building for months. In August 2024, the value of gold imports increased by a staggering 103.7 per cent, and for the broader April-August 2024-25 period, gold imports grew by 25.2 per cent. However, while August saw a 62.24 per cent rise in volume terms, gold imports for the April-August period fell slightly by 2.18 per cent, indicating fluctuating demand dynamics. The report comes at a time when India is grappling with rising overall inflation. Retail inflation hit a nine-month high of 5.5 per cent in September 2024, a sharp jump from 3.65 per cent in August. This surge was largely driven by rising food prices, with food and beverages inflation climbing to 8.36 per cent from 5.3 per cent in the previous month. Notably, vegetable prices alone contributed 2.34 per cent to the overall inflation rate. The combination of rising food inflation and imported inflation has intensified inflationary pressures on the Indian economy. With India heavily dependent on imports for commodities like gold and edible oils, global price fluctuations are feeding directly into domestic price levels. SBIs report underscores the importance of monitoring these external factors as they could further strain inflation management efforts in the coming months. Policymakers now face the dual challenge of addressing both domestic and imported inflation amid a volatile global economic landscape. (KNN Bureau) 39630 https://knnindia.co.in/news/newsdetails/economy/rising-gold-and-oil-imports-push-indias-inflation-to-13-month-peak-sbi-report 2024-10-17 17:22:44 knnindia.co.in Rising Gold and Oil Imports Push India’s Inflation to 13-Month Peak: SBI Report