Consumer prices in India has eased as the country’s CPI inflation in February 2023 slight slowed to 6.44 per cent. However, the retail inflation, based on the Consumer Price Index (CPI), remains beyond the RBI’s tolerance limit of 6 per cent for the second consecutive month.
The retail inflation had stood at 6.52 per cent in January 2023.
According to the latest data from the National Statistical Office (NSO), the retail inflation in rural areas eased to 6.72 per cent in February from 6.85 per cent in January 2023, whereas that in urban areas marginally increased to 6.10 per cent from 6 per cent last month.
Inflation in the food basket, or the Consumer Food Price Index, was marginally up to 5.95 per cent in February 2023, compared with 5.94 per cent in January 2023. The food inflation is responsible for nearly half the CPI basket.
Suvodeep Rakshit, senior economist at Kotak Institutional Equities, said, “February CPI inflation at 6.44 per cent, while elevated, is broadly in line with expectations. Cereals and milk inflation continues to be high while fruits inflation spiked also up in February. However, we see food inflation softening in March 2023 based on recent price trends.”
He also said core inflation at 6.1 per cent remains elevated and sticky with relatively high inflation across clothing and footwear, health, personal care and effects, and household goods/services. Core inflation is the change in prices of goods and services, except energy and food.
“The RBI will remain hawkish in the April policy as inflation prints have spiked back over 6 per cent in January-February along with core inflation remaining sticky above 6 per cent. We continue to expect a 25-bps repo rate hike in the April policy,” Rakshit added.
Month-Wise CPI Inflation Rates In the Current Financial Year 2022-23:
April 2022: 7.79 per cent
May 2022: 7.04 per cent
June 2022: 7.01 per cent
July 2022: 6.71 per cent
August 2022: 7 per cent
September 2022: 7.41 per cent
October 2022: 6.77 per cent
November 2022: 5.88 per cent
December 2022: 5.72 per cent
January 2023: 6.52 per cent
February 2023: 6.44 per cent.
The RBI has been continuously increasing the key repo rate in order to control inflation in the country. It has raised the repo rate six times by 250 basis points in total since May 2022 in order to control inflation. In the last MPC meet last month, the RBI raised the key repo rate by 25 basis points to 6.50 per cent.
The RBI MPC will meet early next month to decide on the further course of action on interest rate.
Read all the Latest Business News here
Comments
0 comment