Retail inflation at 4-month high of 2.57% as food prices rise
Retail inflation jumped to a four-month high of 2.57 per cent in February due to costlier food articles, according to official data released Tuesday.
The Consumer Price Index-based inflation for January was revised down to a 19-month low of 1.97 per cent from earlier estimate of 2.05 per cent.
The retail inflation number for February 2019 is the highest since October 2018 when it stood at 3.38 per cent, the data released by the Central Statistics Office under the Ministry of Statistics and Programme Implementation (MoSPI) showed.
Food inflation was lower at (-) 0.66 per cent in February against 3.26 per cent in the same month last year. The retail inflation in February 2018 was at 4.44 per cent.
On monthly basis, consumer food price index moved up by 0.15 per cent in February against January 2019.
Protein-rich items such as meat & fish and eggs witnessed a quick rise prices at 5.92 per cent and 0.86 per cent respectively in February. Prices of cereal and products went up at 1.32 per cent.
Prices of fruits (-4.62 per cent) and vegetables (- 7.69 per cent) continued to decline in February. In January, the prices declined 4.18 per cent and 13.32 per cent respectively.
In fuel and light category, the rate of price rise slowed to 1.24 per cent from 2.20 per cent in January.
“With the headline inflation reading at 2.57 per cent and industrial production surprising on the downside at 1.7 per cent, there clearly is a case and space for one more rate cut of 25 bps by RBI in April to support growth,” said Rajni Thakur, Economist, RBL Bank.
Core inflation numbers, however, remain sticky at above 5 per cent and prices for most services are rising at above 6 per cent, reflecting pickup in demand conditions and pricing power, particularly in urban economy, she said.
B Prasanna, Head, Global Markets Group, ICICI Bank said, “Headline inflation for February moved upwards to 2.57 per cent as per our expectations.
“The upward movement was driven primarily by a sequential rise seen in various food groups, except in vegetables. Core inflation moved down slightly as expected, reflecting easing of input costs, pricing powers and growing slack in the economy.”
The earlier spikes seen in rural health and education seem to have stabilised for the moment, he said.