Higher prices of food items such as vegetables, eggs, meat and fish, along with fuel costs, pushed India’s retail inflation during January to 7.59 percent from December’s 7.35 percent.
The consumer price index (CPI), or retail inflation, was at 1.97 percent in the corresponding month of last year.
According to the National Statistical Office, the consumer food price index remained at an elevated levels of 13.63 percent, up from minus 2.24 percent recorded in January 2019.
Similarly, the high fuel prices lifted the inflation rate of the ‘fuel and light’ category to 3.66 percent.
The data showed that the retail inflation level continues to remain much above the RBI’s medium-term target for the CPI rate of 4 per cent with a band of +/- 2 percent.
Product-wise, prices of vegetables, eggs, meat, fish and pulses pushed the retail inflation higher on a year-on-year (YoY) basis.
Prices of vegetables in january increased 50.19 percent, meat and fish by 10.50 percent, eggs by 10.41 percent and pulses and their products by 16.71 percent.
“The sharp spike in food inflation has led India’s January CPI to breach a six-year high of 7.59 percent compared to 7.35 percent seen in December,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
“Due to higher inflation, RBI has been maintaining a status quo since December 2019. If inflation continues to hover above 6 per cent, we don’t expect RBI to cut its interest rate or change its accommodative policy stance.”