Retail inflation eases to 5-month low, IIP grows to 4-month high

Retail inflation declined to a five-month low of 4.85 per cent in March mainly due to cooling food prices, inching towards the Reserve Bank’s target of 4 per cent, while industrial production growth accelerated to a four-month high of 5.7 per cent in February 2024, mainly due to the good performance of the mining sector, according to official data released on Friday.

The Consumer Price Index (CPI) based inflation was previously at 5.09 per cent in February and 5.66 per cent in

March 2023, with the last lowest rate recorded at 4.87 per cent in October 2023.

The food basket saw inflation at 8.52 per cent in March, slightly down from 8.66 per cent in February. Notably, inflation in eggs, spices, and pulses showed a month-onmonth ease, although fruits and vegetables experienced a price uptick. The ‘fuel and light’ segment also witnessed lower inflation rates.

The RBI, which considers consumer inflation for its bi-monthly monetary policy, anticipates food price uncertainties to influence the inflation trajectory. It projects retail inflation at 4.5 per cent for the current fiscal year, assuming normal monsoon conditions. However, ongoing geopolitical tensions could pose risks to commodity prices and supply chains, potentially affecting inflation rates.

Inflation rates varied across regions, with rural India experiencing higher inflation at 5.45 per cent compared to the national average, while urban areas saw a lower rate of 4.14 per cent in March. Odisha recorded the highest inflation at 7.05 per cent, and Delhi the