Retail inflation is likely to remain beyond 6 per cent mark for March 2022
Retail inflation, which has remained beyond the 6 per cent mark since January 2022, is likely to surge further and could be in the range of 6.1 to 6.3 per cent in March, owing to rising crude oil and food prices.
Government is set to announce the retail inflation figures later today and if projections from various reports are anything to go by, then it is likely to remain higher than Reserve Bank of India’s (RBI) upper tolerance limit of 6 per cent, for the third month in a row.
India’s retail inflation had risen to 6.07 per cent for February 2022, a touch higher than 6.01 per cent recorded in January 2022. It had risen mainly due to higher food and clothing prices.
A Reuters poll has said that retail or consumer price index (CPI) inflation is likely to jump to a 16-month high of 6.35 per cent in March, owing mainly due to rising food prices.
Crude oil prices have been surging past $100 a barrel mark since March after the Russia-Ukraine war began on February 24, 2022.
The April 4-8 Reuters poll of 48 economists suggested inflation, as measured by the consumer price index (CPI), rose to 6.35 per cent in March on an annual basis, from 6.07 per cent in February. That would be the highest reading since November 2020.
RBI on April 8 had raised the retail inflation target for the current financial year to 5.7 per cent on the back of rising global prices amidst the ongoing geo-political tensions, even as it expected the prices of cereals and pulses to soften on prospects of good winter crop harvest.
“Global food prices along with metal prices have hardened significantly. Economy is grappling with a sharp rise in inflation… Inflation is now projected at 5.7 per cent in 2022-23 with Q1 at 6.3 per cent; Q2 at 5 per cent; Q3 at 5.4 per cent and Q4 at 5.1 per cent,” RBI Governor Shaktikanta Das had said while unveiling the first monetary policy review for the current fiscal (2022-23).
In its earlier policy review in February 2022, the RBI had projected retail inflation to be at 4.5 per cent in 2022-23.
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