Updated February 12th, 2024 at 19:27 IST
Retail inflation eases to three-month low of 5.10% in January
The decline in retail inflation came on the back of softness in food prices which comprises half of the CPI basket as food inflation eased to 8.3 in January.
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Retail inflation, as measured by the consumer price index (CPI), eased to three-month low of 5.10 per cent in January from 5.69 per cent in December, data released by Ministry of Statistics & Programme Implementation (MOSPI) showed.
The decline in retail inflation came on the back of softness in food prices which comprises half of the CPI basket as food inflation eased to 8.3 per cent in January from 9.53 per cent last month.
January retail inflation numbers were largely in line with Reuters estimate of 5.09 per cent.
Reserve Bank of India monitors retail inflation trend to set interest rate. Earlier this month, the RBI maintained its repo rate at 6.50 per cent at its sixth consecutive meeting on February 8, underscoring "large and repetitive food price shocks".
"Overall, we see inflation hovering between 5-5.5 per cent, led by food in 1HCY24, before easing in 3Q towards 4 per cent and rising back to 4.5-5 per cent in the next two quarters. Thus, we don't see any monetary policy action based on inflation this year. It will be determined by the domestic growth trajectory (if it turns out much weaker than the general forecast of 6.5-7 per cent) or if the US FED makes a sharp move," said Nikhil Gupta, Chief Economist, MOFSL Group.
Published February 12th, 2024 at 17:43 IST