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India Monsoon Update: Even though the retail inflation rate has come down to 25 months low of 4.25 per cent in the month of May. But the concerns regarding inflation have not completely ended yet. German brokerage house Deutsche Bank warned that even though the inflation rate may have come down in the month of May, but in view of the delay in monsoon, any laxity regarding inflation will not be right.
Deutsche Bank said in its estimate that in 2023-24 the CPI (Consumer Price Inflation) i.e. Retail Inflation Data is estimated to be 5.2 percent. However, the RBI has set a target of 5.1 per cent inflation during the current financial year. According to Deutsche Bank, monsoon rains are currently 53 per cent less than normal. Due to the onset of weak monsoon, there is always a jump in the prices of food items in July. In such a situation, any kind of carelessness regarding inflation in India will not be right.
The brokerage house said that it would be lucky if the inflation rate in India remains below 5 percent and with this the prices of food items do not increase in July and August. The month of July is going to be the most important. Due to weak monsoon, a sharp jump in food inflation can be seen in July. Deutsche Bank said that due to weak monsoon in 2009 and 2014, there was a jump in food inflation.
It was said in the report that till now the rainfall is 53 percent less than normal. There is a delay in the arrival of South West Monsoon which is delaying the sowing of Kharif crops. The brokerage house said that a sharp jump can be seen in the prices of vegetables like onions, tomatoes, potatoes. Due to the possibilities of El Nino in 2023, the delay in monsoon can increase India’s concern on the inflation front.
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