Extension of coronavirus lockdown set to keep retail inflation elevated

Retail headline inflation in March 2020 fell to a four-month low of 5.9 per cent, 0.7 per cent lower from a month ago and 3.1 per cent higher than the corresponding month a year ago

The extension of the nationwide lockdown to curb the spread of Covid-19 pandemic is set to keep retail headline inflation high in the coming months.

A report by CARE Ratings expects food inflation to be higher due to the entension of the lockdown till May 3. This, in turn, could adversely impact food supply chains. Despite mellowing international crude oil prices, taxes on petrol and diesel could keep prices of commodities at elevated levels. Fuel inflation is also likely to escalate on account of the low base effect though core inflation is slated to be benign in the months ahead.

Retail headline