NEW DELHI: Retail inflation, based on consumer price index (CPI), inched up for the second consecutive month to 3.4% (y-o-y) in March from 3.2% in Feb on account of acceleration in food prices, electricity, gas and other fuels, data released by NSO showed Monday. The food index rose 3.9% in March, above 3.5% in preceding month, while fuel inflation accelerated to 1.7% from 0.1%. Core inflation, after stripping out food and fuel, has remained below 4%. The data showed that personal care, social protection and miscellaneous goods and services inflation decelerated to 18.6%, led by slight deceleration in gold and silver prices. Prices in rural areas rose at a sharper pace (3.6%) compared to urban areas (3.1%). Economists said March saw a mild impact of West Asian crisis, with prices expected to rise in the coming months as the conflict prolongs. RBI had increased the inflation forecast for the current financial year to 4.6% . Crsili’s principal economist Dipti Deshpande said retail inflation in March was “fairly insulated” from the energy price shock and consumers have been “shielded” in April as well. “A persistent increase in global prices could see retail fuel prices climb up, while the adverse impact of heatwaves and increased risk from a below normal southwest monsoon assign an upside to food inflation,” she said. ICRA Ratings chief economist Aditi Nayar expects food inflation to rise further on account of spike in the prices of vegetables, edible oils and readymade food items. “The unrest will continue to feed into prices of several items, such as alternate fuels, airfares, restaurants, (thus) hardening the April print,” she said. CareEdge Ratings chief economist Rajani Sinha expects a limited pass through to retail consumers, even as there will be an indirect impact from rising input prices.
