The Reserve Bank Of India (RBI) stated today in its Annual Report that the evolving Consumer Price Inflation or CPI inflation trajectory is likely to be subjected to both upside and downside pressures. The food inflation path will critically depend on the temporal and spatial progress of the south-west monsoon in 2021. Second, some respite from the incidence of domestic taxes on petroleum products through coordinated action by the centre and states could provide relief, although international crude oil prices continued to be volatile. Third, a combination of high international commodity prices and logistic costs may push up input price pressures across manufacturing and services. Taking into consideration all these factors, CPI inflation is expected to average 5% during 2021-22 - 5.2% in Q1:2021-22; 5.2% in Q2; 4.4% in Q3; and 5.1% in Q4, with risks broadly balanced. During April 2021, inflation moderated on favourable base effects.
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