RBI
High WPI inflation to impact retail inflation: RBI
Mumbai: Amid rising commodity prices and supply chain bottlenecks, the Reserve Bank of India (RBI) on Friday cautioned about the high wholesale price inflation impacting the retail inflation.
In its annual report for 2021-22, the RBI said the headline inflation remained above the target of 4 per cent, even as the government's supply side interventions continued to restrain the pass-through of elevated international edible oil prices to domestic retail inflation.
"Cost-push pressures from high industrial raw material prices, transportation costs, and global logistics and supply chain bottlenecks continue to impinge on core inflation," the RBI said.
The substantial wedge between wholesale and retail price inflation amidst a sharp rise in manufactured products’ inflation poses risk of a possible passthrough of input cost pressures to retail inflation with a lag, although slack in the economy is muting the pass-through, it added.
The WPI inflation surged to a record high of 15.1 per cent in April following the increase in prices of vegetables, fruits, milk, manufacturing, fuel and power.
"The conflict over Ukraine and the consequent spike in commodity prices has overcast the outlook for inflation in India as in the rest of the world," the RBI said.
(With UNI inputs)
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