CHENNAI: Inflation in India at 5.6 per cent for November is higher than most other nations, the Bank of Baroda said in a report.
According to the report, the inflation in India is likely to remain high even in December due to higher food prices but the comfort is the stable core inflation numbers for the past few months which is more susceptible to demand side forces and, in turn, can be controlled by monetary policy. However, food inflation is driven more by supply side pressures where shortfalls in production do manifest in higher prices.
Compared to most other countries, inflation in India is does appear to be on the higher side at 5.6 per cent excluding Argentina and Turkey due to their extreme inflation numbers of 143 per cent and 62 per cent, respectively, the report notes.
Russia and South Africa have higher inflation rate of 7.5 per cent and 5.9 per cent, respectively, ahead of India.
India is followed by Australia with an inflation rate of 5.4 per cent, Singapore and Brazil - 4.7 per cent, UK - 4.6 per cent, Mexico - 4.3 per cent, Japan and South Korea - 3.3 per cent, Canada and the US - 3.3 per cent, Indonesia - 2.9 per cent, Euro Area - 2.4 per cent, Saudi Arabia - 1.6 per cent, Switzerland - 1.4 per cent and China – minus 0.5 per cent, Bank of Baroda said.
"It should be pointed out that inflation in India has been volatile as it is driven by food prices and hence shown differing tendencies every month," the report notes.