INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Retail inflation sped up to a three-month high in January on the back of rising prices of cereals, eggs, meat, fish and milk, and
reversed the reducing trend to posture a fresh difficulty for policymakers.Data launched by the National Statistical Office (NSO) on Monday
revealed retail inflation, as measured by the customer rate index, rose an annual 6.5% in January, greater than Decembers 5.7% and above the
6% taped in January last year.The food cost index increased nearly 6% in January, greater than the 4.2% in December
Rural inflation exceeded metropolitan inflation increasing 6.9%
Urban inflation was at 6%
The retail inflation number for January has breached the upper end of the Reserve Bank of Indias (RBIs) tolerance level and some financial
experts said the higher than expected inflation was uneasy
Earlier this month, the RBI raised rate of interest for the sixth successive time to tame stubborn cost pressure, taking the cumulative
increase since May to 250 basis points (100bps = 1 percentage point)
Core inflation, which omits food and fuel, stayed sticky at 6.6% in January, partially greater than 6.4% in December
Clearly, the inflation fight is not over yet and the moderation seen at the end of 2022 was neither broad-based nor long lasting
While we understand that government interventions (like offloading of wheat stocks in January) coupled with healthy rabi output might assist
relieve pressures on cereal as well as protein inflation (costs of milk, egg and meat typically relocate line with cereals rates with a lag
as it impacts fodder costs etc) over the coming months, managing core inflation could be much tougher, HDFC Bank stated in a note.The
information revealed cereal prices increased 16.1% in January while milk and egg prices soared 8.8%
Rates of spices rose over 21%
Clothes and shoes prices rose more than 9%
Earlier this month backing the requirement for a rate increase, the RBI governor said headline inflation has actually moderated with
unfavorable momentum in November and December 2022, however the stickiness of core or underlying inflation is a matter of concern
We require to see a decisive moderation in inflation
We need to remain steadfast in our commitment to bring down inflation
Therefore, financial policy has to be tailored to ensuring a long lasting disinflation procedure, RBI guv Shaktikanta Das had said in his
monetary policy declaration.
