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Retail Inflation In July Reduces To 5.59%

retail inflation- RBI

In July, India’s retail inflation came down to 5.59%, touching Reserve Bank of India (RBI)’s target range, on falling food prices and ameliorating supply chain disruptions, the government data showed on Thursday.

The consumer price index (CPI) based inflation lowered to 5.59% in the last month from 6.26% in June.  ‘Food inflation increased in June primarily due to an uptick in inflation in edible oils, pulses, eggs, milk and prepared meals and a pick-up in vegetable prices,” said Reserve Bank of India. 

The RBI in its latest monetary policy review has decided to continue with the same stance and pledged to remain accommodative in the coming times while raising its inflation estimation to 5.7 per cent during the fiscal year. For Q1 FY23 CPI inflation is likely to be 5.1 per cent, as per estimates.

“Taking into consideration all these factors, CPI inflation is now projected at 5.7 per cent during 2021-22: 5.9 per cent in Q2; 5.3 per cent in Q3; and 5.8 per cent in Q4 of 2021-22, with risks, broadly balanced. CPI inflation for Q1:2022-23 is projected at 5.1 per cent,” the central bank stated.

Meanwhile, the country’s factory output, measured by the Index of Industrial Production (IIP), had contracted 16.6 per cent in June last year and increased 29.3 per cent in May.

The mining output rose 23.1% and the power generation climbed 8.3% in June, the data showed. During the first quarter of the fiscal year, the IIP increased 45% against a contraction of 35.6% in Q1 FY20.

The dreadful covid-19 second wave experienced in the months of  April and May forced many states to reimpose lockdowns, limiting supply chains; resulting in a spike in inflation. On the recovery of the economy, FM  Sitharaman at CII annual session 2021 event, said, “I am glad that RBI understands that quicker retrieval of the liquidity from the economy may not do the necessary things to win”.

 

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Harshita Sharma

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