Retail Inflation Climbs to 6.01% in January, Highest in 6 Months
New Delhi: Retail inflation rose to 6.01% in January on an annual basis and breached the Reserve Bank of India's upper tolerance level, mainly due to higher prices of certain food items, as per government data released on Monday.
The Consumer Price Index (CPI) based retail inflation was 5.66% in December 2021 and 4.06% in January 2021.
As per the data released by the National Statistical Office (NSO), the inflation in the food basket was 5.43% in January 2022 against 4.05% the preceding month.
Prices of cereals, eggs and milk products spiked in January 2022 compared with December 2021, which led to the rise in retail inflation.
The Reserve Bank, which mainly factors in the CPI-based inflation, has been tasked by the government to keep the inflation at 4%, with margin of 2% on either side.
This is in contrast to what the RBI has projected.
On Monday, RBI Governor Shaktikanta Das said that the "momentum of inflation is on a downward slope" and the central bank would continue to strike a delicate balance between the need to contain price rise and ensure economic growth.
Das said, RBI’s projections are "robust" but contingent on downside and upside risks associated with the movement of global crude oil prices.
He was responding to questions after the meeting of the RBI's Central Board of Directors. The meeting was addressed by Finance Minister Nirmala Sitharaman.
"... Our inflation projections... I would say it is quite robust and we stand by it. If there is something of course totally unforeseen and you know, which nobody can expect that is different and we have said that it is contingent on you know the risk the downside or the upside risk to these projections is the crude prices," the Governor added.
Last week, the RBI had said headline inflation is expected to peak in the fourth quarter of the 2021-22, within the tolerance band and then moderate closer to target in the second half of 2022-23, providing room for monetary policy to remain accommodative.
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