Food Price Index

Food inflation has been outpacing overall inflation since January. It’s headed higher. War-driven cost pressures could combine with El Niño dryness this year to spell misery for multitudes. The Centre has foodgrain buffer stocks—but should draw up other plans.

India’s cost of living went up just 2.1% last month. Amid this heartening run of price relief, can we hope for sustained stability? It would serve as a macro foundation for the economy’s swift and safe emergence.

Food prices have moderated recently, falling from 11% to 6% inflation. Despite some items seeing price drops, others remain high. The upcoming winter harvest faces challenges from heat stress, while soaring edible oil prices reflect global market changes and India's import reliance.

Retail inflation was 5.2% in December, down from 5.5% the month earlier. The hope is that it cools off further and India’s upcoming budget doesn’t stoke price pressures.

November’s 5.5% print has raised hopes of an easing monetary-policy cycle starting in February. It’s not a given, of course, but the latest data does shift the odds in favour of it.

The Indian central bank is required to keep the cost of living stable and so its target gauge must fully represent retail inflation—although we also need to update and improve how we measure it

In the Indian context, headline inflation is a better yardstick of the impact of prices on people’s well-being than some truncated construct. The Reserve Bank of India has good reason to stick to the price gauge it had been using as a guide for monetary policy

The return of Donald Trump to the White House may prove a challenge for Indian policymakers in many ways, especially if a trade war erupts and in fields where interests diverge, but New Delhi has domestic concerns of inflation and slowing output growth to deal with first.