What are the reasons behind the rise in retail inflation, information revealed from SBI's economic report

Retail inflation in September hit a five-month high of 7.4 per cent. SBI's economic report Ecowrap has blamed unseasonal rains for the new trend of inflation. According to the Ecowrap report, some parts of the country have received unseasonal rains up to 700 percent of the normal. In the coming months, its impact will be seen on the production of cereals and fruits and vegetables in many states. 

Year 2019 reference

An example is given in the year 2019, when there was very little rain compared to the current year, but due to this, the rate of inflation in food products increased by four percent within four months. The prices of vegetables had come down till March 2020 but its effect on coarse cereals was seen even later. Inflation in food products stood at 8.4 per cent in September, the highest in the last 22 months. 

In these circumstances, SBI has said that by February, the repo rate can be up to 6.50 percent. Several agencies have said that in view of the new inflation data, the inflation target for the year 2022-23 for the RBI will have to be exceeded by 6.7 percent. The current rate of repo rate is expected to go up to 6.5 percent in the next few months. Keeping in view the inflation, it is expected that the trend of debt becoming expensive will continue.