New Delhi, Mar 13 (FN Bureau) India’s retail inflation measured by consumer price index (CPI) eased slightly to 6.44% in February, 2023 from 6.52% in January, data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed on Monday. The retail inflation though moderated last month but remained elevated with upticks in cereals, milk and fruits inflation. The CPI-based inflation at 6.44% remains in breach of Reserve Bank of India’s upper tolerance of 6%.
This could make a case for the central bank to go for another hike in policy repo rate. “Core inflation at 6.1% remains elevated and sticky with relatively high inflation across clothing and footwear, health, personal care and effects, and household goods/services. The RBI will remain hawkish in the April policy as inflation prints have spiked back over 6% in January-February along with core inflation remaining sticky above 6%,” said Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities. “We continue to expect a 25 bps repo rate hike in the April policy,” he added. Commenting on the inflation number, ICRA Chief Economist Aditi Nayar said that while the correction in the prices of heavily weighted items in the CPI basket such as wheat, vegetables and edible oils augurs well for the food inflation print in the current month, there are concerns around the impact of a likely heat wave on the wheat crop and the consequent impact on wheat prices in the near term. “This along with the possibility of the occurrence of El Nino around the summer season and its impact on monsoons would play an important role in determining the trajectory of food inflation over the next few quarters,” she said.