Core inflation still elevated despite muted demand, easing supply situation

Some economists believe that firms are using the excuse of supply disruptions, earlier due to Covid-19 and now the Russia-Ukraine war, to increase prices, calling it 'excuseflation'

The core retail inflation, which excludes food and fuel items, has been sticky at elevated levels at least since January 2021. It remained high at over 6 per cent throughout FY23 till February, except for May. In fact, it also stood at a high 5.5 per cent in May, though less than the upper tolerance level for the Reserve Bank of India (RBI) for overall inflation at six per cent.

The core inflation remained elevated even during the third quarter of the current financial year despite the demand in the economy growing by just two per cent even in the