Retail inflation drops to 4-month low in February

K. R. Srivats New Delhi | Updated on January 20, 2018 Published on March 14, 2016

food inflation


Vegetable sellers. Photo: shutterstock


With retail inflation easing more than estimated, expectations of a possible rate cut by the Reserve Bank of India (RBI) in April are running high.

Consumer price index (CPI)-based inflation was at a four-month low of 5.18 per cent in February.

Retail inflation stood at 5.69 per cent this January and 5.37 per cent last February. This is the first time in seven months that retail inflation has fallen sequentially.

On Saturday, while remaining non-committal on any rate cut, Rajan said though the latest industrial growth numbers were “disappointing”, the economy was in recovery mode.

A large part of the easing of retail inflation in February could be attributed to the steep decline in food prices, which carry 46 per cent weightage in the consumer price index. Food article inflation fell to 5.30 per cent in February from 6.85 per cent in January. It was 6.88 per cent last February.

Both rural and urban CPI inflation fell sequentially as well as on an annual basis.

While urban inflation in February stood at 4.30 per cent (4.81 per cent in January), rural inflation came in at 5.97 per cent (6.48 per cent).

Last February, rural and urban inflation stood at 5.79 per cent and 4.95 per cent, respectively. Pulses inflation, which has been a pain point for the government, softened for the month under review, at 38 per cent; for the common man though, it is still on the higher side.

WPI inflation

Wholesale Price Index-based inflation remained negative for the sixteenth month in February at (-) 0.91 per cent against (-) 0.90 per cent in January.

Manufactured products inflation, which has a weightage of 65 per cent in the index, rose 0.3 per cent. Food articles were down 3.2 per cent in February.

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Published on March 14, 2016
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