.... Driven by food or otherwise, that’s the inflation households face. Non-food, manufactured goods inflation, to which RBI responds, essentially reflects stable commodity prices with some reduction in pricing power as demand slows. Not surprising then that RBI reiterated its January guidance of whoesale price inflation persisting in the 6.5-7% in 2013-14. This should be the floor though: if GDP growth picks up as expected and global growth recovers, the interplay of global liquidity with a rebound in demand will result in higher commodity prices feeding back into domestic inflation..............
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