THIRUVANANTHAPURAM: The new year has brought no respite to the financial woes of Malayalis as prices of essential commodities continued to spiral. The state recorded the highest retail inflation in the country in January, at 6.76%, even as the national average cooled to a five-month low of 4.31%.
Kerala was followed by Odisha (6.05%) and Chhattisgarh (5.85%). The surge has been attributed to food prices, especially oils and fats. At 7.31%, rural inflation outpaced urban inflation (5.81%) in the state.
Kerala’s inflation rate has breached the Reserve Bank of India’s tolerance cap of 6% every month since last October. The price rise in the state was above the national average since April in 2024.
“Kerala has been recording a higher inflation rate, driven by food prices, for the past three months. In January, food inflation in Kerala was 9.9%, as against the national average of 5.68%. This is ‘imported’ inflation because the major component that pushed it up was ‘oils and fats’. The segment saw a 52% increase in January alone,” said Kiran Kumar Kakarlapudi, assistant professor at Gulati Institute of Finance and Taxation, Thiruvananthapuram.
According to him, Kerala witnessed single-digit inflation for ‘oils and fats’ between January and August of 2024. The gap between the state rate and national average was low during the period. “Prices of oils and fats have gone up consistently since October 2024 -- 33% in October, 40% in November, 44% in December and 52% in January. The segment jacked up the overall inflation rate,” he said.
Another contributor was the fruit basket. “Food and beverages contribute 47% to total inflation. Increase in transportation costs also contributed to the price rise,” he said.