India’s retail inflation rate, which is measured by the Consumer Price Index (CPI), hit a multi-month high of 6.07 per cent in February, according to data released by the National Statistical Organization on Monday.
The latest inflation hike is the highest in six months. The CPI-based retail inflation reading breached the Reserve Bank’s Monetary Policy Committee upper limit in January this year for the first time since June 2021.
The rise in CPI-based retail inflation was supported by a rise in prices of food products, including cereals, eggs, meat, milk products and vegetables. The prices of paan, tobacco, clothes and other essential commodities have also increased. NSO said retail inflation is also rising due to increase in fuel prices.
“The price data is collected from selected 1,114 urban markets and 1,181 villages covering all States/UTs through individual visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster. During the month of February 2022, the NSO collected prices from 99.6 per cent of villages and 98.2 per cent of urban markets, while the market-wise prices were 89.6 per cent for rural and 92.9 per cent for urban, the government said in a press release. ,
“Retail inflation reached 6.07 per cent in February. Meanwhile, food inflation also rose to 5.85 per cent in February from 5.43 per cent in January. This is the 5th consecutive month that an increase in CPI has been observed since the beginning of Q1 of 2022 based on multiple factors such as increase in prices of cereals, eggs and milk products,” said DRE Reddy, CEO & Managing Director of CRCL LLP partner in
“Since the conflict between Russia and Ukraine escalated last month, prices keep changing; India’s inflation has a significant weight of crude oil products which caused the spike. It was mainly due to fresh crop arrivals, hopes of a good monsoon. Along will be cushioned by supply interference,” Reddy said.
Wholesale price-based inflation also rose to 13.11 per cent in February on the back of hardening of crude and non-food articles, even as food articles moderated. WPI inflation has remained in double digits for the 11th consecutive month starting April 2021. Inflation last month was 12.96 per cent, as compared to 4.83 per cent in February last year.
Crude petroleum inflation rose to 55.17 per cent during February from 39.41 per cent in the previous month due to rising global crude oil prices. The Reserve Bank last month kept its key repo rate – the rate at which it lends short-term money to banks – unchanged at 4 per cent for the 10th time in a row to support growth as well as manage inflationary pressures.
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