Inflation rate in India a cause for concern

Inflation rate in India a cause for concern
The rate of inflation in India has assumed ‘worrisome’ proportions, according to financial intelligence firm Moody’s Analytics.

Driven by rising oil and food prices, India’s retail inflation rate has been above the Reserve Bank of India’s (RBI) 4% inflation target for the past eight months, the analyst firm said.

“Volatile food prices and rising oil prices led India’s consumer price inflation (CPI) to exceed the upper band of 6% several times in 2020, inhibiting the RBI’s ability to keep accommodative monetary settings in place during the height of the pandemic. Higher fuel prices will keep upward pressure on headline CPI and keep the RBI from offering further rate cuts,” said the firm,

Describing the rise in inflation as ‘worrisome’, the firm said India’s core CPI (excluding food, fuel and light prices) rose to 5.6% in February from 5.3% in January, even as food and beverage price inflation quickened to 4.3% from 2.7%.