Key Inputs on Inflation from RBI’s Bulletin

Key Inputs on Inflation from RBI’s Bulletin

News: RBI’s December Bulletin focused on how India’s inflation is affected by Demand and supply side measures.

What is Inflation?
• In economics, inflation is a general increase in the prices of goods and services in an economy over a period of time.
• When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.

Key Findings in RBI’s Bulletin:
• Using the Centre for Monitoring Indian Economy’s data, the bulletin categorizes inflation based on price and quantity shifts. When both rise, it’s demand-driven; if they move oppositely, it’s supply-driven.
• Events such as a) COVID-19 Restrictions- Lockdowns caused production declines, leading to supply shortages, b) Excess Rainfall (2019-2020)- it led to supply disruptions, especially for agricultural products and c) Russia-Ukraine war increased supply side issues. All the above are reason of Supply driven inflation.
• Demand Driven inflation includes factors such as Post lockdown recovery which led to rise in demand, vaccine distribution which eventually opened the economy.
• Between January 2019 to May 2023, supply factors contributed to about 55% of CPI headline inflation. In contrast, demand factors dropped to 27.1% in 2020 from 41.5% in 2019 but rose again post-COVID19 and during the Russia-Ukraine conflict.
• Supply Constraints item: Vegetables, oils, fats, milk, eggs, pulses, sugar.
• Items that led to High demand: Non-alcoholic beverages, personal care, health related goods.

DICS Branches

Our Branches

DICS Ahmedabad


(Head Office)

Address : 506, 3rd EYE THREE (III), Opp. Induben Khakhrawala, Girish Cold Drink Cross Road, CG Road, Navrangpura, Ahmedabad, 380009.

Mobile : 8469231587 / 9586028957

Telephone : 079-40098991



Address: A-306, The Landmark, Urjanagar-1, Opp. Spicy Street, Kudasan – Por Road, Kudasan, Gandhinagar – 382421

Mobile : 9723832444 / 9723932444


DICS Vadodara


Address: 2nd Floor, 9 Shivali Society, L&T Circle, opp. Ratri Bazar, Karelibaugh, Vadodara, 390018

Mobile : 9725692037 / 9725692054


DICS Surat


Address: 403, Raj Victoria, Opp. Pal Walkway, Near Galaxy Circle, Pal, Surat-394510

Mobile : 8401031583 / 8401031587


DICS New Delhi

New Delhi

Address: 53/1, Upper Ground floor, Near Popular juice, Old Rajinder nagar, New Delhi -60

Mobile : 9104830862 / 9104830865