Tariff hikes by telcom companies likely to fuel FY25 inflation by 10-15 bps: Report

“The impact will be sharp and will pose an upward bias to core inflation. And as they (telecom tariffs) do not come down, the impact will be seen for a full one-year cycle,” Madan Sabnavis, chief economist at Bank of Baroda (BOB), was quoted as saying by Moneycontrol.

Telecom charges for mobile phones surged 8.9 percent in July compared with a 1 percent hike in the previous month.

The category has a 1.84 percent weight in the inflation basket, according to Moneycontrol report.

India's inflation hit a 59-month low of 3.5 percent in July 2024, compared with 5.1 percent in the previous month, given a favourable base effect from the previous year, reports Moneycontrol, adding that inflation was a high 7.44 percent in July last year.

As per Moneycontrol calculations, while prices across categories remained depressed, core inflation, which considers prices of goods and services without food and fuel, had increased to 3.4 percent from 3.1 percent a month back.

This marks the first rise in core inflation in 14 months, as reported by Moneycontrol.

Data also shows that besides telecom tariffs, internet expenses too have increased.

Internet expenses, which have a negligible 0.08 percent share in the consumer basket, shot up 2.6 percent in July from 0.9 percent in June.