By Tushar Goenka

BENGALURU, (Reuters) – India’s retail inflation accelerated to 6.0% last January. This is the maximum limit of Reserve Bank of India’s tolerance band. It was driven by higher prices for consumer goods and telecom, as well as a comparatively low rate a Reuters poll revealed.

While inflation is rising all over the globe, India isn’t the only one. But price increases have been historically moderate and allow the central bank to maintain unchanged interest rates for the moment.

However, daily consumables prices like tea and cooking oil have increased 20% to 40% since the COVID-19 pandemic.

Last month, the prices for food, vegetable, and oil were moderated month over month.

From 5.59% to December, 37 economists polled by the Feb. 7-9 Poll predicted that inflation would rise as measured from the consumer price index (CPI). This is the highest annual rate in seven month.

Surprisingly, more than one third of the respondents (14 of 37) expected that inflation would exceed the RBI’s threshold of 6.00%.

Radhika Rao (senior economist, DBS Bank), said that “besides unfavourable base effects and non-food components within the inflation basket will likely add to the headline’s rise.” Radhika Rao forecasts inflation at 6% in accordance with the Reuters poll median.

These will likely offset the rising price pressures caused by a seasonal drawback in food, and steady domestic gasoline at the beginning of the year.

The RBI, which stated that restoring growth is a priority, was still expected to keep its benchmark rate on Thursday. This was according to a separate Reuters poll. It was close to a lifting of the April rates.

According to another Reuters poll, inflation is expected to hover between 4.8% and 5.8% through the end of 2023. This falls below the RBI’s 2%-6% target range.

“Inflation does not show signs of persistance yet, and it remains within the RBI target band. According to Sakshi Gupta (senior economist, HDFC Bank), it is likely that the central bank will choose to examine it now.

“We believe the RBI will continue to support growth, and we expect them to raise rates once more signs point towards a better recovery.”