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Bloomberg
India’s retail inflation slowed below 6% for the first time in 2022 amid cooling global commodity prices and higher borrowing costs, providing reprieve for policymakers.
The consumer price index rose 5.88% from a year earlier, according to data released by the Statistics Ministry on Monday. That’s slower than a median estimate for a 6.35% gain in a Bloomberg survey of economists, and compares to the 6.77% pace in October.
The data comes days after the Reserve Bank of India (RBI) slowed the pace of interest rate hikes while vowing to keep a close eye on inflation and act as necessary. The central bank has raised borrowing costs by 225 basis points this year, its most aggressive monetary tightening since 2011, to tame inflation that stayed above its 2%-6% target band for most of 2022.
“The surprise push lower of inflation into the target band is welcome news, but is driven by perishable food prices like vegetables,†said Rahul Bajoria, economist at Barclays PLC.
Moderating global commodity and food prices, and a bountiful winter harvest at home eased price pressures.