Food, core push inflation above the RBI target band again

Consumer Price Index (CPI) inflation jumped sharply in January to 6.52% on-year (from 5.72% in December). The acceleration was driven largely by a rise in food (cereals, protein-based items) and core (personal care and effects) inflation. Both momentum (from on-month price increases) and some low-base effect contributed to pulling up the headline inflation, overwhelming the effect of deflation in vegetables. In fact, excluding vegetables, CPI inflationwould have jumped to 7.7% (compared to 7.2% in December).

Highlights of inflation trends in January
 

• CPI inflation rose to 6.52% from 5.72% in December 2022, and 6% print of January 2022
  
• Food and beverage inflation jumped the most: to 6.2% from 4.6% previous month
  
• Fuel¹ inflation moderated slightly to 10.8% from a downwardly revised 10.9% of December
  
• Core CPI² inflation remained sticky at 6.2%, slightly higher than the 6.1% of December

¹ Refers to CPI fuel and light
² CPI excluding food and beverages, and fuel and light