Retail inflation likely to fall to 5% by March: SBI Report

For the most part of last year, retail inflation was well above the 6% mark and above the Reserve Bank of India's comfort zone.

A new SBI research report says that inflation is likely to fall to 5% by March. Retail inflation for the month of december came in at 5.72%, marginally lower than 5.88% in November 2022 and down from 6.77% in October 2022. 

The SBI report by SBI Group Chief Economic Advisor Soumya Kanti Ghosh says that "CPI inflation fell to a 12-month low of 5.72 per cent in December 22, along expected lines, primarily due to huge decline in vegetable prices".  The report goes on to say, "Against the evolving landscape, we see little incentive for further (repo) rate hike, with synchronised past actions on rate front yet to show the full impact". 

Remember, RBI has undertaken aggressive rate hikes, to the extent of 225 basis points, in an effort to curb inflationary pressures.