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India’s retail inflation hits 6.52%
February 14, 2023
Data released by the National Statistical Office on Monday showed the Consumer Price Index-based inflation rate rising unexpectedly to a three-month high at 6.52 per cent in January, from 5.72 per cent in December, as goods across categories, including food and beverage, housing, and services, saw price rise, with food prices leading the chart.
Core inflation, which excludes food and fuel prices, remained sticky above the 6 per cent mark. The upside inflation surprise came days after the RBI revised down its January-March quarter retail inflation forecast by 20 basis points (bps) to 5.7 per cent.
The MPC hiked the repo rate by another 25 bps, while cautioning that further calibrated monetary policy action is warranted to keep inflation expectations anchored, break the persistence of core inflation, and thereby strengthen the medium-term growth prospects.
Abheek Barua, chief economist at HDFC Bank, said it is clear that the inflation fight is not over yet and the moderation seen at the end of 2022 was neither broad-based nor durable.
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