Retail prices may continue to remain elevated even as wholesale prices ease

With wholesale prices galloping in double-digits since April last year, companies found themselves in a fix, raise prices too much and hurt a nascent recovery in demand or absorb costs and take a hit

Indian consumers expecting retail inflation to cool in tandem with easing wholesale prices are in for disappointment.
 

That’s because the consumer price index, currently hovering above the central bank’s 2%-6% target band, has shown little correlation with the wholesale measure in the past decade. And if historical trends are any indication, the two indexes have had an inverse relationship for the most part of that period, which analysts attribute to the pricing power of most businesses.

 

Data due later Monday will probably show retail inflation quickened to 6.9% last month from a year earlier, according to