Sri Lanka

Retail inflation soars to 3-month high of 6.5%

NEW DELHI: Retail inflation accelerated to a three-month high in January, driven by higher prices for grains, eggs, meat, fish and milk, and reversed an easing trend, posing fresh challenges for policymakers.
Retail inflation, as measured by the consumer price index, rose 6.5 percent year-on-year in January, up from 5.7 percent in December and 6 percent in January last year, data from the National Statistics Office (NSO) showed on Monday.
this food price index It rose nearly 6 percent in January, up from 4.2 percent in December. rural inflation Exceed city ​​inflation up 6.9%. The city’s inflation rate is 6%.
Retail inflation data for January has breached the upper limit of the Reserve Bank of India’s (RBI) tolerance level, with some economists calling higher-than-expected inflation “worrying”. Earlier this month, the Reserve Bank of India raised interest rates for the sixth time in a row to curb stubborn price pressures, bringing the cumulative increase since May to 250 basis points (100 basis points = 1 percentage point).
core inflationJanuary, which excludes food and fuels, remained sticky at 6.6%, slightly higher than December’s 6.4%.
“Clearly, the inflation struggle is not over, and the slowdown seen in late 2022 will be neither broad nor long-lasting. While we know that government intervention (such as a sell-off of wheat stocks in January) combined with healthy rabbinical production could help ease inflation in the coming months Controlling core inflation may become more difficult due to monthly grain and protein inflationary pressures (milk, egg and meat prices typically move in line with grain prices, but with a lag as it affects feed costs, etc.), HDFC Bank said in a note. in the note.
Cereal prices rose 16.1% in January, while milk and egg prices surged 8.8%, the data showed. Spice prices soared more than 21%. Clothing and footwear prices rose by more than 9%.
Earlier this month, the RBI governor backed the need for rate hikes, saying headline inflation slowed to negative momentum in November and December 2022, but the stickiness of core or underlying inflation was a concern.
“We need to see a marked slowdown in inflation. We must remain steadfast in our commitment to bring it down. Monetary policy must therefore be tailored to ensure a durable disinflationary process,” RBI Governor Shakti Kantadas He said in a statement on monetary policy.

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