Retail inflation is likely to remain at elevated levels in the next few months on account of supply constraints driven by labour shortage, rather than due to fiscal deficit or other external factors, according to a State Bank of India report.
The ‘Ecowrap’ also said the Ministry of Statistics and Programme Implementation (MOSPI) should take into account online prices of products while computing retail inflation as more and more people are relying on online stores, especially after the outbreak of COVID-19.
It further said that MOSPI appeared to have underestimated retail inflation by including some items including services, unmindful of the fact that their consumption fell drastically on account of COVID-19 and the subsequent lockdown.
As per the data released by the National Statistics Office (NSO), the retail inflation was 6.09% in June. “Based on our new weights, as per our SBI Computed COVID CPI (consumer price index), the actual headline inflation is much higher than the imputed inflation.
“Our June 2020 inflation is at 6.98%, almost 90 basis points (bps) higher than the imputed inflation of NSO,” the report’s author said.
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