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    BusinessRBI Governor Shaktikanta Das says disinflation facing challenges from persistent rise in...

    RBI Governor Shaktikanta Das says disinflation facing challenges from persistent rise in food prices


    While retail inflation eased slightly in May to 4.75% from 4.83% in April according to 's central bank, Governor Shaktikanta Das stated that disinflation or the drop in inflation is facing resistance due to stubbornly high food price rises. Although core inflation excluding food and fuel moderated to 3%, food inflation persisted at 7.9% in May.

    Das highlighted that over the past six to seven months, food inflation has averaged around 8%. He noted that conditions like the extreme summer heat last year have impacted cultivation of essential items like pulses and vegetable production, keeping food prices elevated. This is posing difficulties for a faster decline in overall consumer inflation which the RBI has set a 4% target for.

    While asserting confidence in achieving the inflation target, the Governor said the last leg of lowering inflation is proving quite challenging due to the slower fall in food prices. Das also remarked that changing the monetary policy stance at this juncture from “withdrawal of accommodation” would be premature without stronger signs of a faster decline in inflation.

    The RBI will closely monitor the evolving inflation scenario with Das indicating they will take an evidence-based approach relying on clearer proofs of moderating price pressures rather than reacting hastily. With rural demand and crop prospects appearing positive, the central bank hopes stable food production will help relieve pressures on household budgets and support broader economic activity.

    The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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