Retail inflation, based on the consumer price index (CPI), averaged 6.2%, a good 140 basis points higher than in 2019-20. Crisil’s forecast of 5% CPI inflation for the fiscal is premised largely on expectations of softer food inflation. Greater spread of food inflation into rural areas could lead to a disruption in production and transportation of food to wholesale markets or mandis. However, the pressure on CPI inflation has come primarily from rising fuel inflation so far. The path of retail inflation thus remains fraught with upside risks.

Source: Mint May 31, 2021 16:52 UTC