February Sees Inflation Steady at 5.09%, Maintaining Level from January’s 5.1%

This report provides an overview of India’s Consumer Price Index (CPI) inflation data for February, highlighting various components such as food , core inflation, and fuel inflatin, along with insights into industrial production and economic growth indicators. Let’s break down the details:

1. Overall CPI Inflation: The Consumer Price Index (CPI) remained stable at 5.1% in February, compared to January’s figure of 5.1%. This suggests a consistent inflatio,n rate, with minor fluctuations.

2. Core Inflation: Core , which excludes volatile food and fuel prices, decreased to 3.37%, the lowest level since November 2019. This indicates that the non-food and non-fuel sectors of the economy are not contributing significantly to inflatioary pressures.

3. Food Inflation: Food inflatio.n increased marginally from 8.3% in January to 8.6% in February. This rise is primarily attributed to sharp increases in prices of eggs, fish, and meat. Vegetable inflatio also saw an uptick from 27.1% in January to 30.3% in February.

4. Fuel Inflation: Fuel inflatin experienced a slowdown, contributing to the overall stability of CPI inflatio. However, specific figures regarding fuel inflatio are not provided in the excerpt.

5. Industrial Production: The Index of Industrial Production (IIP) for January was slightly lower than analyst projections, growing at 3.8%. Manufacturing, which holds significant weight in the IIP basket, grew at 3.2% in January, down from 4.5% in December 2023. This suggests a moderation in industrial growth.

6. Economic Momentum: While the IIP numbers indicate a slight slowdown, caution is advised in interpreting them as a significant decline in economic momentum. The Purchasing Managers’ Index (PMI) for manufacturing shows that the sector gained momentum in January and February compared to December 2023 levels, remaining in the expansion zone.

7. Analyst Forecasts and Expectations: Analysts, such as Rahul Bajoria from Barclays, anticipate policy easing from the Reserve Bank of India (RBI) starting from the third quarter of 2024. This expectation is based on factors such as food prices, core inflaion trends, and overall economic growth.

In summary, the report provides a comprehensive analysis of India’s infltionary trends, highlighting stable overall CPI inflatio.n, fluctuations in food infation, moderation in core inflatio, and industrial production figures. It also offers insights into analyst expectations regarding RBI policy actions and the broader economic outlook.