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Retail Inflation Hits 8-Month High of 6.07% in Feb on Spike in Food Prices

PTI |
The RBI has retained the retail inflation projection for 2021-22 at 5.3%, with January-March quarter of the fiscal at 5.7%
Retail Inflation Hits 8-Month High of 6.07% in Feb on Spike in Food Prices

Representational image. | Image Courtesy: Flickr

New Delhi: Retail inflation hit an eight-month high of 6.07% in February, remaining above the RBI's comfort level for the second month in a row, while wholesale price-based inflation soared to 13.11% on account of hardening of crude oil and non-food item prices, government data showed on Monday.

The previous high for retail inflation was 6.26% in June 2021.

The consumer price index (CPI) based retail inflation, which is taken into account by the Reserve Bank of India (RBI) while deciding its monetary policy, rose mainly because of costlier food items, as per the data released by the National Statistical Office (NSO).

The RBI has been mandated by government to keep retail inflation at 4% with a margin of 2% on either side.

The Consumer Price Index (CPI) based retail inflation was 5.03% in February 2021. It stood at 6.01% in January this year.

In a different set of data released by the commerce ministry earlier in the day, the Wholesale Price Index (WPI) based inflation in February rose to 13.11% due to hardening of prices of crude oil and non-food items, even though food articles softened.

On the CPI front, the rate of price rise in the food basket was 5.89% in February, up from 5.43 per in the preceding month.

In this food basket, inflation in cereals moved up to 3.95%; 'meat and fish' to 7.45%, while for eggs, the rate of price rise was 4.15% during the month.

Among others, vegetables turned dearer with an inflation print of 6.13%, and for spices it rose to 6.09%. In fruits, the inflation remained static at 2.26% when compared to the preceding month.

In 'fuel and light', inflation softened to 8.73% as against 9.32% = in January.

Notably, 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%, with January-March quarter of the fiscal at 5.7% on account of unfavourable base effects that ease subsequently.

The central bank has projected the retail inflation for 2022-23 at 4.5% .

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