January’s inflation data served us a reminder of RBI’s challenge4 min read 21 Feb 2023, 08:22 PM IST
Up moves can occur as disinflation is rarely a linear process but India’s muted second-round effects argue for path optimism
The inflation data for January has taken almost everyone by surprise. Headline inflation in India peaked in September 2022. It then fell for three months in a row, only to bounce back in the first month of this year, once again outside the formal target given to the Indian central bank. The sticker shock in January may well be a temporary blip because of higher cereal prices, or it could be a lesson in the fact that disinflation is rarely a neatly linear process. There will be reversals.
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