India’s retail inflation rate slightly decreased to 5.09 per cent on an annual basis in February compared to 5.10 per cent in the previous month, according to data released by the Ministry of Statistics & Programme Implementation (Mospi) on Tuesday.
The rate has stayed within the Reserve Bank of India’s (RBI) tolerance band of two to six per cent.
The inflation rate in rural and urban areas was 5.34 per cent and 4.78 per cent respectively.
Food inflation for February stood at 8.66 per cent versus 8.30 per cent recorded in January.
Vegetable inflation surged to 30.25 per cent from 27.03 per cent in January. Meanwhile, the fuel and light inflation witnessed a contraction of minus 0.77 per cent, compared to a contraction of minus 0.60 per cent in the previous month.
IIP Data
The Ministry of Statistics and Programme Implementation (Mospi) has reported that India’s industrial production remained unchanged at 3.8 per cent in January. The Reserve Bank of India (RBI) has highlighted ‘large and repetitive food price shocks’ as one of the biggest risks to the ongoing disinflation trend.
The RBI Monetary Policy Committee (MPC) left its inflation forecast for FY24 unchanged at 5.4 per cent in its February meeting, despite concerns about rising food prices, crude costs, and domestic growth momentum creating demand pressure on inflation. The central bank expects inflation to be 5 per cent in the current quarter ending 31 March.
The RBI has identified geopolitical events and their influence on supply chains, along with the volatility in international financial markets and commodity prices, as ‘key sources’ of upward risks to inflation.
The collective impact of policy repo rate increases is still being felt throughout the economy. For Q1 FY25, Q2 FY25, Q3 FY25 and Q4 FY25, the inflation reading was pegged at 5 per cent, 4 per cent, 4.6 per cent and 4.7 per cent, respectively, assuming a normal monsoon next year.
