New Delhi: The Reserve Bank of India's annual report has revealed a surge in India's inflation, primarily driven by escalating prices in the food and beverages category during the fiscal year 2023-24.
According to the report, the contribution of food and beverages to headline inflation surged to 60.3 percent, up from 46 percent in the previous year. Despite a moderation in headline inflation by 1.3 percentage points to 5.4 percent on an annual average basis, the report emphasised the persistent vulnerability of food inflation to recurring supply shocks, hindering a swift alignment with the 4 percent target.
The RBI attributed this softening to the easing of supply chain pressures, a broad-based moderation in core inflation, and early signs of an above-normal southwest monsoon. However, concerns loom over the impact of climate shocks, with low reservoir levels in southern states and the prospect of above-normal temperatures in the initial months of 2024-25 requiring close monitoring, said reports.
Additionally, the report highlighted upward risks to the inflation trajectory posed by volatile international crude oil prices, geopolitical tensions, and elevated global financial market volatility.
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