Retail inflation to come down with easing of lockdowns: CEA

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published Published on Sep 13, 2020   modified Modified on Sep 13, 2020

-PTI/ The Hindu

“Overall, the difference between wholesale and retail inflation is primarily due to supply-side factors which should decrease and therefore going forward even the retail inflation should ease,” Mr. Subramanian said.

Attributing the rise in inflation to supply-side frictions, Chief Economic Adviser K V Subramanian has exuded confidence that retail inflation will come down in the days ahead with the easing of lockdowns.

According to the government data, retail inflation rose to 6.93% in July, mainly driven by rising prices of food items like vegetables, pulses, meat and fish.

However, wholesale price-based inflation declined 0.58% in July, even as food items turned costlier.

“If you look at inflation...it’s primarily because of those supply-side frictions, but as local lockdowns are actually being reduced, these frictions should basically go down,” he said.

“Overall, the difference between wholesale and retail inflation is primarily due to supply-side factors which should decrease and therefore going forward even the retail inflation should ease,” Mr. Subramanian said.

There are fears that retail inflation would remain at an elevated level during the rest of the year limiting the scope for the RBI to further ease the benchmark interest rate.

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PTI/ The Hindu, 13 September, 2020, https://www.thehindu.com/business/Industry/retail-inflation-to-come-down-with-easing-of-lockdowns-cea/article32591945.ece?homepage=true


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