Retail inflation in India eases to a four-month low of 5.09 per cent in February from 5.10 per cent in January. The latest numbers are well within tolerance level of the Reserve Bank of India (RBI) ‘s 2-6 per cent for the six consecutive months. Inflation in rural areas came at 5.34 per cent in February, which is the same as in January and 5.93 per cent in December, while in the urban areas, inflation for the month of February eased slighlity to 4.78 per cent as against 4.92 per cent recored in January.
Food and beverage recorded an inflation of 8.66 per cent against 8.3 per cent in January.
According to a release by the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation on Tuesday, the price data are collected from selected 1,114 urban markets and 1,181 villages covering all States/UTs through personal visits by field staff of Field Operations Division of NSO.
During February, NSO collected prices from 100.0 per cent villages and 98.5 per cent urban markets while the market-wise prices reported therein were 90.3per cent for rural and 92.7 per cent for urban.
According to the data released by the National Statistical Office (NSO), retail inflation in the food basket was at 8.66 per cent in February, marginally up from 8.3 per cent in the previous month.
The Reserve Bank of India (RBI) has been tasked by the government to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.
Akhil Mittal, senior fund manager (Fixed Income), Tata Asset Management, said, “Headline inflation in February 2024 stands at 5.09 per cent, slightly below market expectations of 5 per cent and lower than January’s 5.10 per cent. The major contributor was food inflation, registering at 8.66 per cent against 8.3 per cent in January. Core inflation remains below 3.4 per cent, offering significant reassurance and potentially steering headline inflation closer to the RBI’s 4 per cent target in the long run. While the RBI has highlighted the risk of food inflation spilling over into broader inflation, we anticipate the regulator to maintain a cautious stance. However, softening of core inflation should provide relief. We think RBI would rather continue with stability priority and continue maintaining 4 per cent inflation target as sacrosanct, and hence we do not see premature easing from the RBI.”
Last month, the central bank projected the CPI inflation at 5.4 per cent for the current fiscal (2023-24) and recorded at 5 per cent in January-March quarter.