Tuesday, 27 September 2022

India Retail inflation reached 6.01% in January

India Retail inflation reached 6.01% in January

India's inflation accelerated to 6.01% in January, breaking the (RBI) Reserve Bank of India tolerance of 6% marginally.

Last year, inflation's rise was driven by higher consumer goods and telecom prices and a comparatively low rate.

As measured by the (CPI) consumer price index, inflation was 5.66% in the preceding month of December.

Meanwhile, Food inflation has surged to 5.43% in January compared to 4.05% in Dec.

A poll pegged by Reuters the retail inflation at 6% in Jan.

Rajani Sinha, CE & ND – Research, Knight Frank India said.

"While the consumer price index inflation for Jan 2022 has touched RBI's upper tolerance section, the positive aspect is that consumer price index inflation has fallen on an MoM basis. The consecutive fall has been possible mainly because of softening of food prices. However, the major concerning aspect is that the core inflation has remained over 6%,"

Inflation in the fats and oils segment rose to 18.7% in the reporting month, while the price rise in the light and fuel category too stayed elevated at 9.32% in January.

Meantime, the rate of price rise in the beverages and food segment stood at 5.58% in January.

Price rise in rural areas was sharper than the urban areas. Rural inflation increased to 6.12% in Jan 2022 from 5.36% in the last month, while urban inflation increased marginally to 5.91%.

India Retail inflation reached 6.01 in Januaryunsplash image

Read More:₹1.30 lac crore GST Collected in January

Sinha further added.

"Going Ahead, the sharp rise in global oil prices and its impact on consumer price index inflation will be a major cause of concern for the Reserve Bank of India. While Reserve Bank of India has given kindly inflation projection for FY23, it will be analytic to watch what happens next to commodity prices and exactly global oil prices in the next few months,"

Earlier during the day, Shaktikanta Das, RBI governor, said that the central bank is committed to its inflation mandate. The gain in January inflation towards the upper end of its target section should not create any panic.

Last week, in a move, the RBI's monetary policy committee kept rates and its stance unchanged to make sure a broad-based recovery and projected retail inflation to ease to 4.5% in the next FY.

The Reserve Bank of India governor expects inflation to peak in the current quarter with a tolerance section, moderating in the second half of the next FY.

However, the hardening of crude oil prices presents a significant upside risk to the inflation outlook. Core inflation remains elevated at tolerance testing levels. However, the continuing pass-through of tax cuts relating to petrol and diesel last November would help moderate input cost pressures to some extent, Das said.

The Central bank's monetary policy has been mandated to maintain annual inflation at 4% till March 31, 2026, with a higher tolerance of 6% and a lower tolerance of 2%.

She added.

"For now, we expect the RBI to abstain from rate changes before the August policy,"

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