Food inflation biggest challenge in disinflationary process: RBI Guv Shaktikanta Das

Mumbai: Despite the central bank's efforts to reduce India's retail inflation to its 4 percent target, the final stages of the disinflationary process are challenging due to persistently high food prices, Reserve Bank of India Governor Shaktikanta Das stated at an event on Tuesday.

IBNS • 18 Jun 2024, 03:42 pm

"The disinflationary process is facing a lot of resistance from food inflation which is stubborn and high, primarily due to supply side factors affected by weather conditions," Das said at ETNow Leadership Dialogues in Mumbai.

Das emphasized that, similar to trends in some advanced economies, the final phase of the disinflation journey is proving to be both sticky and arduous.

Retail inflation, measured by the Consumer Price Index, eased to a one-year low of 4.75 percent in May. However, food basket inflation remained high at 8.69 percent, slightly down from 8.70 percent in April.

Similarly, wholesale prices were affected by rising food costs, with wholesale price index (WPI) inflation reaching a 15-month high of 2.61 percent in May.

Inflation in food articles climbed to a 10-month high of 9.82 percent in May. Vegetable inflation surged to 32.42 percent, up from 23.60 percent the previous month. Onion inflation was at 58.05 percent, and potato inflation reached 64.05 percent. Pulses inflation rose to 21.95 percent in May.