Indian Headline Buzz

January saw a three-month low of 5.1% for retail inflation

<p>According to official statistics issued on Monday, the country’s retail inflation rate dropped to a three-month low of 5.10% in January as a result of slower price rises in some food categories. It decreased to 5.1% in January 2024 from 5.69% in December of the previous year and 6.52% in January of 2023.</p>
<p><img decoding=”async” class=”alignnone wp-image-402154″ src=”×422.jpg” alt=” january saw a three month low of 5 1 for retail inflation newindianexpress 2024 02″ width=”1074″ height=”604″ title=”January saw a three-month low of 5.1% for retail inflation 3″ srcset=”×422.jpg 750w,×576.jpg 1024w,×432.jpg 768w,×220.jpg 390w,×84.jpg 150w, 1200w” sizes=”(max-width: 1074px) 100vw, 1074px” /></p>
<p>The consumer price food index (CFPI) was higher in January 2023 at 6% than it was in December 2023, when it dropped to 8.3%. While vegetable prices jumped by 27.03% in January, somewhat less than the 27.64% reported in December, cereal prices increased by 7.83% year over year in January compared to 9.93% in the previous month.</p>
<p>The Reserve Bank of India (RBI) decided to hold interest rates unchanged last week despite the drop in retail inflation, suggesting a delay in rate decreases to meet the 4% inflation goal. Retail inflation in the current fiscal year, which ends in March, is expected by the RBI to average 5.4%, with 5% in the fourth quarter. With the first quarter at 5.0%, the second quarter at 4.0%, the third quarter at 4.6 percent, and the fourth quarter at 4.7%, it has forecast 4.5% for the next fiscal year.</p>
<p>stronger-than-expected food inflation, driven by stronger sequential momentum in eggs, meat & fish, and pulses, is what caused the little upside surprise in CPI inflation. Cereals, on the other hand, continued to face pressure even though they rose significantly in 2023. According to Madhavi Arora, an economist from Emkay Global Financial Services, “vegetable inflation has also remained elevated with sequential contraction being less than the usual seasonal behavior.”</p>
<p>Aditi Nayar, Chief Economist, Head Research and Outreach, ICRA Ltd., claims that a favorable base effect was the main driver of the inflation adjustment for food and drink. Although rabi planting has surpassed last year’s level, reservoir storage is still far below levels from the previous year in the majority of areas, which further raises concerns about the rabi harvest’s prospects. “After a 49-month hiatus, the miscellaneous sub-group, which includes a variety of services, saw inflation drop below 4%. It is predicted to stay below 4% during H1 CY2024, which bodes well for core inflation,” she said.</p>
<p>Dec. IIP slows to 3.8%</p>
<p>According to official statistics issued on Monday, India’s industrial output growth fell to 3.8% in December 2023, mostly as a result of the mining and power generating divisions’ subpar performance. In December 2022, the rise in industrial production as shown by the Index of Industrial Production (IIP) was 5.1%.</p>

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