Explained: How rising retail inflation will disrupt India’s economic recovery

The country’s retail inflation, measured by the Consumer Price Index (CPI), jumped to 5.03 per cent in February. It is the highest retail inflation recorded in three months. Experts are worried that inflation will further increase due to high energy prices. Here is how higher inflation will impact economic recovery:

Retail inflation is once again rising in India after cooling down for a few months. In February, retail inflation increased sharply due to rising food and energy prices. The country’s retail inflation, measured by the Consumer Price Index (CPI), jumped to 5.03 per cent last month, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI). It is the highest retail inflation recorded in three months. While retail inflation is still within the Reserve Bank of India’s target band of 2-6 per cent, experts are worried that inflation will further increase due to high energy prices, which is already having a cascading impact on the prices of other commodities as well. For instance, food inflation rose steeply by 3.87 per cent in February in comparison to 1.89 per cent in January.