InvestorQ : Is the sharp fall in retail inflation for March due to the lockdown?
Lavanya Subramanian made post

Is the sharp fall in retail inflation for March due to the lockdown?

Answer
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ishika Banerjee answered.
8 months ago
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Not entirely, but partially yes because the lockdown only happened in the last week of March and this fall in inflation in March is for the full month. It was actually, the sharp fall in vegetable prices that led retail inflation to fall from 6.58% in February to a four-month low of 5.91% in March. Overall food inflation fell from 10.81% in February to 8.76% in March because of falling onion prices which was reflected in vegetable inflation softening from 31.61% to 18.63% in the two-month period. However, economists believe this could be a false impression as the fall in prices may have been caused due to weak demand. The real impact may be visible in April as the shortages have caused prices of food products to rise. The inflation could also remain higher as supply could be constrained due to trucks being detained, labour refusing to come back and cold storages not being allowed to function. The real test may be April inflation.

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