Retail Inflation Moderates To 5.10 Per Cent In January

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India’s retail inflation eases to 5.10 per cent in January, the lowest in three months, from 5.69 per cent in December. As per the latest data released by the National Statistical Office (NSO) on Monday, food and beverage recorded an inflation of 8.3 per cent in January, compared to 8.70 per cent the previous month. In August 2023, inflation touched a high of 6.83 per cent.

In the latest RBI MPC last week, the central bank projected retail inflation for 2023-24 at 5.4 per cent. For the current quarter (Q4), the projection was lowered to 5 per cent from 5.2 per cent earlier. For FY25, the inflation projection has been kept unchanged at 4.5 per cent, with Q1 at 5 per cent, Q2 at 4 per cent, Q3 at 4.6 per cent and Q4 at 4.7 per cent.

The RBI has been tasked by the government to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.

Akhil Mittal, senior Fund Manager-Fixed Income, Tata Asset Management, said, “With the RBI stating risk of food inflation translating into generalised inflation, we expect the RBI to continue cautious stance. However, softening of core inflation should provide confidence to trajectory of inflation moving as expected. We think the RBI would rather continue with stability priority and continue maintaining 4 per cent inflation target as sacrosanct, and hence, we do not see premature easing from the RBI.”

The price data are collected from selected 1,114 urban markets and 1,181 villages covering all states/UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster. During the month of January, NSO collected prices from 99.8 per cent villages and 98.5 per cent urban markets while the market-wise prices reported therein were 89.9 per cent  for rural and 93.6 per cent for urban.

On the other hand, India’s Index of Industrial Production (IIP) grew by 3.8 per cent in December, the NSO data said.

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