India’s retail inflation rate shot up to 6.95 per cent in March from 6.07 per cent a month ago, thus remaining above the central bank’s tolerance limit for the third consecutive month in a row.
Data released by the National Statistical Office on Tuesday showed that the soaring retail inflation was led by edible oils (18.79 per cent), vegetables (11.64 per cent), meat and fish (9.63 per cent), footwear and clothing (9.4 per cent) and fuel and light (7.52 per cent).
Separately, the index of industrial production (IIP) data released by NSO showed factory output grew 1.7 per cent in February annually. However, sequentially IIP growth rate contracted 4.7 per cent, signalling economic revival is yet not on a strong footing.
In its latest monetary policy review, the central bank kept policy rates unchanged but signalled that it would now prioritise on keeping inflation in check, over incentivising growth. RBI changed its growth projection downward and raised its inflation projection assuming crude oil prices at $100 per barrel due to the Russian invasion of Ukraine. The GDP growth forecast was revised to 7.2 per cent for FY23 from 7.8 per cent projected during the February meeting. The inflation projection has been revised sharply from 4.5 per cent to 5.7 per cent for FY23.
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