Retail Inflation Rises To 6.52% In January After Falling For 2 Months

Retail inflation was above the RBI’s upper targeted limit of 6% for the first time in three months.

New Delhi:

The annual retail inflation rate for India rose to 6.52 per cent in January from 5.72 per cent in December, government data showed today.

CPI (Consumer Price Index) inflation was above the Reserve Bank of India’s targeted limit of 6 per cent for the first time in three months. 

The previous high was 6.77 per cent in October.

An increase in food prices is one of the key reasons behind the rise in retail inflation – food inflation rose to 5.94% in January from 4.19% in December. Food price inflation accounts for almost 40% of the consumer price index basket.

Prices of cereals were up 16.12 per cent on a year-on-year basis, eggs rose by 8.78 per cent and milk was up 8.79 per cent. Prices of vegetables dipped 11.7 per cent.

Last week, the RBI (Reserve Bank of India) hiked the repo rate by 25 basis points, noting that core inflation remained high.

The Reserve Bank has been mandated by the government to ensure the retail inflation remains at 4 per cent, with a margin of 2 per cent on either side.

The retail inflation rate for rural and urban India was 6.85 per cent and 6.00 per cent, respectively. Elevated prices of cereals, eggs, and spices, among others, contributed to the rise in food inflation in January.

Retail inflation had fallen back into the RBI’s threshold in November 2022.

The RBI had last week raised the repo rate a sixth time since May to 6.50 per cent and had left the door open for further tightening to tame inflation. 

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