NEW DELHI: The retail inflation print for Sept is expected to see a big jump due to unfavourable base effect and pick up in food price momentum, caused by the lingering effects of a shortfall in the production of onion, potato and chana dal (gram) in 2023-24, among other factors, a top official said on Wednesday.
“Unexpected weather events and worsening of geopolitical conflicts constitute major upside risks to inflation.International crude oil prices have become volatile in Oct. The recent uptick in food and metal prices, as seen in the Food and Agricultural Organisation (FAO) and the World Bank price indices for Sept, if sustained, can add to the upside risks,” RBI governor Shaktikanta Das said in his monetary policy statement on Wednesday.
Retail inflation softened in July and Aug but some food prices, particularly vegetables, surged. Das also said the inflation trajectory is projected to sequentially moderate in the fourth quarter of this year due to good kharif harvest, ample buffer stocks of cereals and a likely good crop in the rabi season.
“The adverse impact of these risks cannot be underestimated. It is with a lot of effort that the inflation horse has been brought to the stable, i.e. closer to the target within the tolerance band compared to its heightened levels two years ago,” said Das.
“We have to be very careful about opening the gate as the horse may simply bolt again. We must keep the horse under a tight leash, so that we do not lose control. Going forward, we need to closely monitor the evolving conditions for further confirmation of the disinflationary impulses,” said the RBI governor.
