CPI inflation reached 4.9 per cent from February's 5.1 per cent

CPI decline: The Consumer Price Index (CPI) inflation experienced a modest decline, reaching 4.9 per cent from February's 5.1 per cent, aligning closely with forecasts. This moderation in inflationary pressures was widespread, with approximately 61 per cent of the CPI basket showing price growth of less than 4 per cent, up from 54 per cent in December 2023, a report by CareEdge showed on Friday. 

Core inflation also remained subdued, dipping marginally to 3.3 per cent in March, maintaining a consistent position below the 4 per cent threshold for four consecutive months.

Various non-food and non-fuel categories, such as clothing, household goods/services, and healthcare, witnessed a moderation in inflation, contributing to the decrease in core inflation. Both core goods and services inflation saw a decline to 4 per cent and 2.9 per cent, respectively. Meanwhile, deflation in the fuel and light category intensified to 3.2 per cent in March, attributed partly to the reduction in LPG cylinder prices.

Despite the overall moderation in the CPI basket, food inflation remained elevated, albeit with a slight slowdown. March saw food inflation decrease marginally to 7.7 per cent from 7.8 per cent in February. Notably, double-digit growth persisted in categories like vegetables (28.3 per cent), pulses (17.7 per cent), spices (11.4 per cent), and eggs (10.3 per cent), raising concerns about sustained price pressures in certain non-perishable food items.

However, supply-side interventions, including the Open Market Sale Scheme (OMSS) and export restrictions by the government, played a crucial role in tempering food inflation. Additionally, the outlook for food inflation has brightened with increased acreage in rabi sowing compared to the previous year and expectations of a normal monsoon, which is crucial for the upcoming Kharif season. The arrival of the rabi harvest is also anticipated to contribute to the moderation of food inflation.