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Expensive food items putting pressure on inflation: RBI

Last updated on: June 17, 2013 14:31 IST

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Expressing concerns over price situation, the RBI said on Monday expensive food items like cereals and vegetables have continued to put pressure on overall inflation rate.

"Still elevated food inflation, particularly in respect of cereals and vegetables, sustained upside pressures on overall inflation," RBI Governor D Subbarao said in mid-quarter review of the monetary policy.

Given that food inflation remains high, the inflation outlook will be influenced by concerted efforts to break food inflation persistence, he said.

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Image: A shopkeeper does calculations standing in his nut and spice shop in Mumbai.
Photographs: Arko Datta/Files/Reuters
Tags: RBI , D Subbarao

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Pinning hopes on rain God's intervention to cool price situation, the RBI chief said 'last year's robust rabi production and the monsoon performance so far augur well for growth prospects.'

He noted that the onset of the south-west monsoon has been strong and on time.

The inflation outlook going forward will be determined by suppressed inflation being released through revisions in administered prices, including the minimum support prices as well as the recent depreciation of the rupee, he added.

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Image: A vendor sells spices on a street in Srinagar.
Photographs: Fayaz Kabli/Reuters
Tags: RBI

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The policy review noted that retail inflation, as measured by the new combined (rural and urban) CPI, edged down from an average of 10.2 per cent last fiscal year to 9.3 per cent in May.

Headline wholesale price index inflation eased for three months in succession with the May reading at 4.7 per cent, down from an average of 7.4 per cent in 2012-13, it said.

All constituent categories, barring food, have moderated, the RBI review said.

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Image: Eggs are pictured for sale at a supermarket.
Photographs: Jason Reed/Reuters
Tags: RBI , CPI

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In the fuel category, it said, coal and mineral oil prices declined, partly offsetting the upward revision in administered prices of electricity.

Non-food manufactured products inflation too ebbed, driven by metal prices which fell for the eighth successive month in response to softening of global prices, it said.

Easing commodity prices at the global level and weaker pricing power of corporates at the domestic level are having a softening influence, it added.

 


Photographs: Reuters
Tags: RBI

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