Corona will push up inflation: RBI warns

Prices will rise in the coming months as supply of food and manufactured goods is disrupted

Mumbai, Ta. Tuesday, August 25, 2020

Inflation is expected to rise in the coming months as the Koro epidemic disrupts the supply of food items and manufacturing products, according to the Reserve Bank's 2019-20 annual report.

The RBI has said that inflation has risen in the last months of 2019-20. Disruption in the supply of food and manufacturing items may put pressure on the prices of these items. Which puts inflation at risk.

The RBI has said that all these factors will put a burden on households. Most households are sensitive to rising food and fuel prices.

In this scenario, the RBI will have to keep a close eye on food prices in its monetary policy review. Retail inflation rose to 6.93 per cent in July, according to government data. Rising prices of vegetables, pulses, meat and fish have pushed up inflation.

In its monetary policy review earlier this month, the RBI said retail inflation would rise in the second quarter. However, inflation will decline in the second half of this year. The Reserve Bank has said that the prices of various products in the food group have risen at different times. The report said that it will take time for demand to grow and will depend on government spending.

This time, the RBI has not released its GDP estimates in its report. However, most financial institutions have projected a sharp decline in India's GDP. GDP figures for the April-June quarter will be released on August 31. Global and domestic agencies have projected a 20 per cent drop in GDP.