India's Jan retail inflation accelerates to seven-month high of 6.01% y/y
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BENGALURU - India's annual retail inflation rose to 6.01% in January, its highest pace in seven months, from a revised 5.66% in the previous month, pushed up by rising prices of food and manufactured items, government data released on Monday showed.
Analysts in a Reuters poll had predicted annual inflation to touch 6.0%, the upper limit of the Reserve Bank of India's 2% to 6% target.
COMMENTARY
RUPA REGE NITSURE, GROUP CHIEF ECONOMIST, L&T FINANCIAL HOLDINGS, MUMBAI
"CPI inflation at 6.01% is very close to my projection of 6.02% and the main culprit is unfavourable statistical base for the food inflation.
"Core inflation has remained sticky at 6.20%. Despite a reduction in fuel taxes, fuel and light inflation remains high at 9.32%. Upward moving Brent crude prices triggered by the geopolitical tensions, depreciation bias in rupee and the risk of imported inflation pose key risks to Indian inflation scenario, going forward.
"Rising interest rates in overseas markets coupled with rising hedging costs will reduce the attractiveness of overseas borrowings for Indian companies."
UPASNA BHARDWAJ, SENIOR ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
"The inflation reading came in line with our expectations. The Reserve Bank of India (RBI) too was expecting the reading to be around the upper limit. However, the trajectory is expected to have peaked out in January. More so, RBI's own H2 FY23 estimates remain closer to 4%, although lower than our estimates, thereby not warranting any concern on policy changes."
