Retail inflation quickens to 6.07 pc in February; remains above RBI’s comfort zone for second month

New Delhi, March 14

Retail inflation inched up to an eight-month high of 6.07 per cent in February, remaining above the RBI’s comfort level for the second month in a row, mainly on account of a rise in food prices, official data showed on Monday.

The Consumer Price Index (CPI) based retail inflation was 5.03 per cent in February 2021 and 6.01 per cent in January this year. The previous high was 6.26 per cent in June 2021.

The Reserve Bank of India (RBI) has been asked by the government to ensure that the CPI inflation remains at 4 per cent with a margin of 2 per cent on either side.

Another set of data released by the government earlier in the day showed that the Wholesale Price Index (WPI) based inflation in February rose to 13.11 per cent on hardening of prices of crude oil and non-food items, even though food articles softened.

According to the CPI 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 the 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 from 9.32 per cent in January.

The RBI mainly factors-in the CPI-based inflation while arriving at its bi-monthly monetary policy. The RBI has not changed the key policy rate after May 2020, citing inflationary concerns and to support growth.

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. PTI