Further, the central bank raised its inflation projection for the current fiscal year to 6.7% from 5.7% estimated in April, mainly due to a spike in tomato prices that could fuel food inflation.

The central bank has been criticised for its inaction to control rising price pressures, caused by global supply shocks and geopolitical turmoil. It was only in April that the RBI acknowledged the surge in consumer inflation, but did not take any material steps.

“The inflation prints of the next two quarters are likely to exceed 7%, which could pressure the RBI into acting sooner rather than later,” Madhavi Arora, lead economist at Emkay Global Financial Services said.

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