India’s Retail Inflation Reaches Three-Month High at 4.81% Due to Soaring Food Prices
Ira Singh
13 July’23
India’s retail inflation surged to a three-month high of 4.81% as a result of escalating food prices,but remains within the tolerable range of the Reserve Bank of India (RBI), the government data showed on Wednesday.
The surge in inflation is being attributed to a higher-than-expected supportive base, besides the rise in vegetable prices,shows the data by the Ministry of Statistics & Programme Implementation.
The latest data released by the government indicates a significant uptick in retail inflation, which is measured by the Consumer Price Index (CPI). The rise to 4.81% marks a notable increase from the previous month’s figure and represents the highest level observed in the past three months.Last month, the inflation based on the Consumer Price Index (CPI) was at 4.31 per cent. In May it was 2.43 per cent and 7.75 per cent in June of the previous year, according to reports.
Inflation is an important yardstick for the RBI’s Monetary Policy Committee to determine the repo or the lending rate of the country and it is mandated to ensure that retail inflation hovers around 4 per cent with a margin of 2 per cent on either side.
Last month, the Reserve Bank kept policy rates unchanged at 6.5 per cent and projected retail inflation for the current fiscal to average at 5.1 per cent, with June quarter inflation pegged at 4.6 per cent.
The next policy review is scheduled for early next month, according to sources.