Higher costs of food from India to China are increasing prices for one third of the world’s population, adding to the difficult challenge of sustaining the world economic recovery as the outlook dims for growth.
China’s consumer prices were up over 3% last month as cost of food increased the most since May of 2012. In India, the inflation unexpectedly increased to a high of seven months said the Commerce Ministry. Both gauges were up higher that what economists had predicted.
In both India and China, over the past couple of months, food has been the main driver of inflation increasing, said an economist bases in Singapore.
The global outlook for growth was cut by the International Monetary Fund last week, as outflows of capital continued to weaken emerging markets.
While the central bank in China is facing less pressure to increase the cost of borrowing, India’s reserve bank last month raised the benchmark repurchase rate, to stem price increases, to 7.5%.
Import costs in India jumped as the currency in the country, the rupee, fell over 14% the past 12 months versus the dollar, compared with a gain of 2.5% for the yuan in China over the same period.
The yuan strengthened to a high of 20-years following increases in prices and the central bank set the reference rate of the currency at a new record.
The rupee was weaker on Monday in Mumbai, while the yuan was up.
The economy in China is estimated to have expanded by 7.8% over the past quarter ending at the end of September from the same period a year ago.
