Mint showed. To be sure, the inflationary pressure has become less broad-based over the months, with the number and weight of such items coming down in the past year. Prices of 83 out of the 299 items in the inflation basket rose by 6% or more as compared to the same month a year ago.
In comparison, 158 items with a combined weight of 55% had recorded 6%-plus inflation in October 2022. However, high inflation in some of the key food items may continue to worry the central bank, which, while keeping the repo rate unchanged, delivered a hawkish monetary policy earlier this month. The monetary policy committee noted that “the unprecedented food price shocks were impinging on the evolving trajectory of inflation and that recurring incidence of such overlapping shocks can impart generalization and persistence"..
While inflation is unlikely to come down durably to 4% at least for a year, the risk of inflation getting generalized is lower compared to the previous year, Kotak Institutional Equities said in a note last week. What is more worrying is that while vegetable prices have corrected, other food items are continuing to see elevated inflation. Excluding fruits and vegetables, food and beverages inflation remained as high as 6.7% in September, the highest in six months.
Cereal inflation eased slightly but was still in double digits at 11%, pulses and products inflation is now as high as 16.4%, spices 23.1%, milk and products 6.9%, and eggs 6.4%. However, some correction in food inflation is expected in the current quarter with the arrival of kharif crops in the market and due to various government measures, Crisil said. At the same time, rising crude oil prices could throw a spanner in the works for the inflation
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