INSUBCONTINENT EXCLUSIVE:
Retail Inflation: The Reserve Bank tracks consumer inflation for formulating its monetary policy
Consumer price inflation in the country eased to 4.06 per cent in January 2021 from 4.59 per cent in December 2020,
amid a sharp decline in food prices
Consumer inflation in January 2021, fell to a 16-month low, according to data released by the ministry of Statistics and Programme
Implementation (MoSPI), on Friday, February 12
The annual retail inflation last month was reported as the lowest since September 2019, and below the 4.45 per cent forecast in a Reuters
The retail food prices, which comprise nearly half of the country's inflation basket, increased 1.89 per cent in January from a year
earlier, against 3.41 per cent in December 2020
The Reserve Bank of India (RBI) tracks the retail inflation - or the rate of increase in consumer prices as determined by the
Consumer Price Index (CPI) - primarily for making changes to its monetary policy
inflation was expected to remain within the targeted range over the next few quarters.Core inflation, excluding food and fuel costs, was
level estimated by economists in December 2020
The government does not release official core inflation data
keeping the market flushed with liquidity to help the large borrowing programme announced by the government for the next fiscal period.The
The average inflation during April-January 2021 continues to remain elevated at 6.4 per cent, which is significantly higher than the
inflation target set by the central bank.The food price decline was led by vegetables, which declined by a significant -15.9 per cent
year-on-year, while other food commodities such as pulses and cereals fell sequentially
Edible oil prices continued to rise sharply, along with modest gains in fruit and beverages.Despite the easing, persistent double-digit
inflation remains in protein items such as meat (12.5 per cent), eggs (12.9 per cent) and pulses (13.3 per cent) coupled with oils (19.7 per
Likely pressures in future from escalating oil prices cannot be ruled out
Joseph Thomas, Head of Research - Emkay Wealth ManagementSeparate data on Friday showed that factory production, measured by the Index of
inflation such as transport and communication are on a rise which reflect the potential inflationary pressures in the economy
With the rise in fuel prices, there is a risk of a sustained increase in core inflation amidst the ongoing economic revival
projections by Economic Survey and International Monetary Fund
