After remaining above 6% for two months in a row, retail inflation fell to a 15-month low of 5.66% in March, falling below the RBI’s comfort level. Retail inflation, as measured by the Consumer Price Index, was 6.44 percent in February 2023, compared to 6.95 percent the previous year. In December 2021, the previous low was also 5.66%. Inflation has slowed due to lower vegetable prices and other items such as oils and fats, whose index fell 2.6 percent month on month in March. Cereals, sugar, and confectionery all saw price decreases. The steep drop was aided by a strong base effect, which is expected to last at least through the first quarter. The base had grown due to a sharp rise in oil and food prices following the start of the Russia-Ukraine conflict last February, as well as stronger demand after the third Covid wave subsided, said Dharmakirti Joshi, chief economist at Crisil. Meanwhile, the Index of Industrial Production, which measures the performance of eight core sectors, increased by 5.6% in February, compared to 5.5% in January, owing to improvements in manufacturing.
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