Retail Inflation: Once again relief on inflation front, reduced to 5.09% in February
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According to data released by the National Statistical Office (NSO), retail inflation in the food basket stood at 8.66 per cent in February, marginally higher than 8.3 per cent in January.
According to official government data, India’s retail inflation remained stable at 5.09 percent in February 2024 compared to 5.1 percent in January. However, the numbers indicate a significant decline on a year-on-year (YoY) basis as India’s Consumer Price Index (CPI) for February 2023 was recorded at 6.44 per cent. According to data released by the National Statistical Office (NSO), retail inflation in the food basket stood at 8.66 per cent in February, marginally higher than 8.3 per cent in January.
This number is within the target range of the Reserve Bank of India (RBI), which has an upper tolerance level of 6 percent. The central bank of India is tasked by the government to ensure that retail inflation remains at 4 percent with a margin of 2 percent on either side. Last month, the central bank had estimated CPI inflation at 5.4 per cent for fiscal year 2023-24 and 5 per cent recorded in the January-March quarter.
Suvodeep Rakshit, senior economist at Kotak Institutional Equities, told Reuters the February CPI inflation print does not raise any further concerns. We expect the inflation trajectory to be around 4.5%-5% in FY2025, with a decline of around 3% in the second quarter due to sharp base effect.
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