MUMBAI, July 28 Reuters India39;s gold demand in the first half of 2022 jumped 42 from a year ago but consumption in the second half could be lower than last year as higher inflation erodes disposable income, the World Gold Council WGC said on Thursday.

Lower purchases by the world39;s secondbiggest gold consumer could weigh on prices , which are trading near their lowest level in more than a year.

But falling demand for gold imports could help narrow India39;s trade deficit and support an ailing rupee .

Inflation is making it difficult for people, especially in rural areas, to save more and allocate to gold, Somasundaram PR, regional chief executive officer of WGC39;s Indian operations, told Reuters.

India39;s annual inflation rate in June remained painfully above the 7 mark and beyond the central bank39;s tolerance band for the sixth month in a row, raising the prospects for more rate hikes by the central bank next month.

In the shortterm, the rise in local gold prices because of a depreciating rupee and increase in import duty on the bullion will also hurt demand, he said. 

India39;s demand for gold jumped 43 from a year ago to 170.7 tonnes in the quarter through June as jewellery sales improved because of weddings and the annual Hindu and Jain holy festival of Akshaya Tritiya, when buying gold is considered auspicious, the WGC said in a report published on Thursday.

In the first half of 2022, gold consumption rose 43 to 306.2 tonnes.

The WGC earlier…