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CPI retail inflation for January 2024 falls to 3-month low of 5.10%

from india retail inflation It fell to a three-month low of 5.10% in January 2024, the data showed Ministry of Statistics and Program Implementation, According to government data consumer price Index (CPI) inflation Rural CPI was 5.34% and urban CPI was 4.92%. Joint cpi inflation For January 2024 it was 5.10%. The final CPI data for December 2023 came in at 5.69%.
In January, food inflation, which comprises almost half of the total consumer price basket, eased to 8.30% from 9.53% in December.
Quantaco Research economist Vivek Kumar said with favorable seasonal support from food, deflation in fuels and weak core inflation drivers, headline CPI inflation fell to a 3-month low in Jan-24. If food price pressures remain controlled in the near term, the downward trend may continue. “However, potential adverse effects from increased commodity trade costs following climate risks and unrest in the Red Sea could drive volatility in food prices,” he told Reuters.
Meanwhile, the Reserve Bank of India kept its repo rate at 6.50% for the sixth consecutive meeting on February 8, highlighting “large and repeated food price shocks” as a key risk to the ongoing deflationary trend. Did.
“Core inflation, after easing to 4.9 per cent in October, rose to 5.7 per cent in December 2023. This was mainly due to food inflation, mostly vegetables. The softening of core inflation (CPI inflation excluding food and fuel) continued across both goods and services, reflecting the cumulative impact of monetary policy actions as well as significant moderation in commodity prices. However, uncertainties in food prices are weighing on the core inflation trajectory,” RBI said. Governor Shaktikanta Das said in his monetary policy statement.
“The MPC will carefully monitor any signs of normalization of food price pressures that could spoil the gains in the reduction in core inflation. To bring inflation down to the 4 per cent target on a sustainable basis, monetary policy must remain actively deflationary. The MPC will remain firm on this commitment.”
Economists polled by Reuters estimated India’s retail inflation fell to a three-month low of 5.09% in January. A separate Reuters poll indicated inflation would average 5.4% this fiscal year and 4.7% in the next, close to the RBI’s forecasts of 5.4% and 4.5%.
However, the RBI is expected to keep its key policy rate unchanged until at least the end of June before considering a 25 basis point rate cut in the third and fourth quarters, compared to expectations of easy cycles from other global central banks. is a relatively minor step. ,

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