NEW DELHI: Retail inflation based on consumer price index (CPI) hit an eight-month high of 6.07 per cent in February, data released by government showed on Monday. The previous high for retail inflation was 6.26 per cent in June 2021.
The inflation figure for the month of January stood at 6.01 per cent.
According to the data released by the National Statistical Office (NSO), the rate of price rise in the food basket was 5.89 per cent in February, up from 5.43 per in the preceding month.
In this food basket, inflation in cereals moved up to 3.95 per cent; 'meat and fish' to 7.45 per cent, while for eggs, the rate of price rise was 4.15 per cent during the month.
Among others, vegetables turned dearer with an inflation print of 6.13 per cent, and for spices it rose to 6.09 per cent. In fruits, the inflation remained static at 2.26 per cent when compared to the preceding month.
In 'fuel and light', inflation softened to 8.73 per cent as against 9.32 per cent in January.
The Reserve Bank of India (RBI) mainly factors in retail inflation while arriving at its bi-monthly policy.
Reserve Bank's monetary policy committee (MPC) has been tasked by the government to tame retail inflation based on consumer price index (CPI) at 4 per cent (+,-2 per cent).
This month too the inflation figure remained above the upper limit of RBI's targeted range.
Notably, RBI has not changed the key policy rate after May 2020, citing inflationary concerns and to support growth.
WPI inflation accelerated in February and remained in double digits for the 11th consecutive month, beginning April 2021. It was 4.83 per cent in the same month a year ago and 12.96 per cent in the preceding month, January 2022.
The rise in crude oil and natural gas prices after the Russian invasion of Ukraine, beginning February 24, has put pressure on the wholesale price index, even though food articles saw softening across categories of vegetables to pulses and protein-rich items.
Bank of Baroda Economics Research said, "With geopolitical uncertainty and commodity prices still remaining fairly elevated, we believe inflation to be above 5.5-6 per cent in FY23, which is higher than RBI's projection of 4.5 per cent."
Global food prices are also on an upswing. Thus, the pass through to wholesale and retail inflation is yet to be fully materialised. RBI should take into account of these factors in its upcoming policy, when globally central banks are reiterating their concerns of inflation overheating, it added.
The RBI has retained the retail inflation projection for 2021-22 at 5.3 per cent, with January-March quarter of the fiscal at 5.7 per cent on account of unfavourable base effects that ease subsequently.
The central bank has projected the retail inflation for 2022-23 at 4.5 per cent.
(With inputs from agencies)
