Retail Inflation Holds Steady at 5.09% in February, Government Data Shows

The Consumer Price Index (CPI) serves as the basis for measuring inflation, with the latest numbers indicating a stable trend in consumer prices.

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X: @the_news_21

According to government data released on Tuesday, retail inflation in India remained nearly unchanged at 5.09% in February, compared to 5.1% in January. This figure is a slight decrease from the 6.44% recorded in February 2023.

The Consumer Price Index (CPI) serves as the basis for measuring inflation, with the latest numbers indicating a stable trend in consumer prices. However, inflation in the food basket saw a marginal uptick, rising to 8.66% in February from 8.3% in the previous month.

The Reserve Bank of India (RBI) has been mandated by the government to maintain retail inflation at 4%, with a margin of 2% on either side. Despite the slight increase in food inflation, the overall CPI figure remains within the RBI’s target range.

In its recent projections, the central bank estimated CPI inflation at 5.4% for the current fiscal year (2023-24), with a recorded rate of 5% in the January-March quarter.

Suvodeep Rakshit, a senior economist at Kotak Institutional Equities, commented on the February CPI inflation figures, stating that they do not raise any significant concerns. Rakshit anticipates the inflation trajectory to hover around 4.5%-5% for the fiscal year 2023-24, with a temporary dip to around 3% in the second quarter due to base effect adjustments.

As India navigates economic challenges, including inflationary pressures, policymakers will continue to monitor consumer price trends closely to ensure macroeconomic stability and sustainable growth.

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