Rising food prices push retail inflation to 4.91%

Data released by the National Statistical Office (NSO) shows that rising food price inflation in November was at 1.87% in October which is an increase of 1.02% in October and is one of the primary causes of the relatively high retail inflation rate at 4.91% experts said.

Government data showed on Monday, December 13. The Consumer Price Index (CPI) based retail inflation was 4.48% in October 2021 and 6.93% in November 2020. While announcing the monetary policy for the last time of this fiscal year, RBI Governor Shaktikanta Das said that retail inflation forecasts were expected to hover around 5.3% for this fiscal year and then drop to 5% in the first quarter of next year.

The RBI, which mainly factors in the retail inflation while arriving at its bi-monthly monetary policy, expects the inflation print to be somewhat higher over the rest of the year as base effects turn adverse, a report in The News Minute claimed. Price pressures may persist in the immediate term, Das said.

Last Wednesday, the RBI announced that India's GDP forecast was stable at 9.5% but that it would require "perseverance" and patience to get the economy back to a self-sustaining stage.

Governor Das highlighted that consumption demand has been improving, with pent-up demand getting reinforced by the festive season. Rural demand is exhibiting resilience and farm employment is picking up with the robust performance of agriculture and allied activities. The recent reductions in excise duty and state VAT on petrol and diesel should support consumption demand by increasing purchasing power, Das said.