India's retail inflation eases to 4-month low of 5.09% in January

New Delhi, Mar 12: India'’s retail inflation slowed to a four-month low of 5.09 per cent in February bringing some relief to household budgets, official figures released on Tuesday showed.

The retail Inflation in January was a tad higher at 5.1 per cent.

There was a sharp decline in cooking oil prices during February which came down by as much as 11.67 per cent. The price rise in spices slowed to 13.51 per cent compared to 16.36 per cent in January.

However, the data show that vegetable prices shot up by as much as 30.25 per cent in January while pulses turned costlier by 18.9 per cent. The prices of cereals went up by 7.6 per cent.

The consumer price inflation is now above the 4 per cent midpoint of the RBI’s 2-6 per cent target range and is the main reason why the central bank is not going in for a cut in interest rates to spur economic growth. The RBI is keen to keep inflation under control to ensure stability and has held the repo rate steady at 6.5 per cent for six consecutive times in a row in its bi-monthly monetary policy reviews.

The latest inflation data comes weeks before the RBI's Monetary Policy Committee (MPC) meets again on April 3-5.

ICRA Chief Economist Aditi Nayar said barring food and beverages, the inflation across all other sub-groups eased in February 2024, indicating that the momentum in the non-food items continued to track a welcome moderation.

The food and beverages inflation printed above the 7 per cent mark for the fourth month in a row. While the food and beverages inflation posted an unpleasant uptick in February 2024 vis-a-vis January 2024, this was not broad-based, with seven of the 12 sub-items witnessing a moderation in their YoY inflation print, she added.

Meanwhile, industrial production clocked a 3.8 per cent growth in January, according to data released by the Ministry of Statistics on Tuesday.

The overall industrial growth for April-January 2023-24 works out to 5.9 per cent, as compared to 5.5 per cent growth recorded in the same period of 2022-23.

At 3.8 per cent, the industrial growth figures for January are the same as the provisional figures for December 2023 released earlier.

However, the number for December was revised upwards on Tuesday to 4.2 per cent, as more data came in since the figures were announced last month.

The manufacturing output, which accounts for more than three-fourths of the Index of Industrial Production (IIP) recorded a 3.2 per cent growth during January, while electricity generation grew at a higher 5.6 per cent as compared to the provisional figures of 1.2 per cent in December.

The mining sector output recorded a growth of 5.1 per cent during the month under review.