Retail inflation eases to 5.91%
Drop in food prices keeps CPI rise under check; data collection hit by COVID-19
- Retail inflation dropped to 5.91% in March from the 6.58% in February, mostly on a drop in food prices, according to the Consumer Price Index data released by the National Statistical Office on Monday.
- Food inflation fell to 8.76% in March, in comparison with the 10.81% in February. Vegetable price inflation saw the sharpest fall, dropping from 32% to 19% over the course of a month.
- Spices and prepared food, snacks and sweets were the only food categories that saw a slight increase in prices.
- Retail inflation has been easing off since hitting an almost six-year high of 7.59% in January, and analysts expect the trend to continue over the next few months.
- With low crude oil prices and sharp slowdown in the economy, CPI inflation is expected to fall further.
- Weak demand side pressure on inflation would outweigh any supply side bottlenecks in the near-term.
- The COVID-19 crisis has also affected field data collection used to calculate inflation, although the NSO said the overall impact of missing price data on CPI estimates was within acceptable limits.
- For assessing the price behavior of remaining price quotations, NSO follows well established and internationally accepted methodology and practices.
- Price data is usually collected from selected 1,114 urban markets and selected 1,181 villages by the Field Operations Division of NSO in a uniform weekly roster.