January retail inflation rises to 6.52%, highest since October 2022

India’s retail inflation in January rose to a three-month high at 6.52 per cent, data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed on Monday. In January 2022, the retail inflation was 6.01 per cent.

In December, the CPI-based inflation was 5.72 per cent with core inflation at 6.10 per cent.

The retail inflation, also called consumer price index (CPI), tracks the change in retail prices of goods and services which households purchase for their daily consumption.

In rural India, the inflation rose to 6.85 per cent. In urban parts of the country, it was up 6 per cent.

The food inflation was recorded at 5.94 per cent as compared to 5.43 per cent an year ago. It was also higher than 4.19 per cent recorded in December 2022.

In the recent monetary policy announcement, Reserve Bank of India (RBI) Governor Shaktikanta Das had said that in FY23, the inflation is expected to grow at 6.5 per cent. In FY24, it is expected to fall to 5.3 per cent. However, he noted that the inflation is still “sticky”.

He added that even though the inflation will moderate in the next fiscal, it will remain above the 4 per cent level. The RBI is mandated to keep inflation at 4 per cent with a margin of 2 per cent on either side.

In response, the Monetary Policy Committee (MPC) hiked the repo rate by 25 basis points to 6.5 per cent.

A Reuters poll had predicted the inflation in January to rise to 5.9 per cent from 5.72 per cent in December. It, however, said that the inflation easing continued in the wholesale prices. Wholesale inflation likely slowed to 4.54 per cent in January from a year ago, down from 4.95 per cent in December, it said.