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CPI inflation in India has probably peaked; should moderate in February

As a result, India’s main inflation gauge – the Consumer Price Index (CPI) – which indicates that retail price inflation has jumped on a sequential as well as year-on-year basis. ‘other.

The index rose to 6.01% last month, from 5.66% in December 2021 and 4.06% recorded in January 2021.

As a result, the retail inflation rate exceeded the Reserve Bank of India’s target range.

The central bank has a CPI target range of 2-6%.

In addition, the rate of increase in the consumer food price index, which measures changes in retail food prices, rose to 5.43% last month from 4.05% in December 2021. .

“The CPI has likely peaked and could moderate to 5.7% YoY in Feb 2022. Also, growth is a bigger concern in India right now than inflation,” Motilal Oswal said. Financial Services.

“In fact, we expect real GDP growth of 5-5.5% year-on-year against a market consensus of 6%. As a result, we believe monetary policy normalization would be gradual in India.”

In addition, food inflation hit a 14-month high of 5.4% yoy in January 2022, down from 4% yoy in December 2021 and 1.9% yoy in January 2021.

“In food, vegetables were the main cause of the upward price movement; excluding vegetables, the CPI hit a nine-month low of 6.1% year-on-year in January 2022.”

“Other items such as cereals and derivatives, pulses and derivatives, eggs, meat and fish, milk and dairy products and spices – which represent 25% of the weight of the index CPI – also contributed to the rise in inflation”.