India’s CPI inflation drops to a 9-month low of 4.85% in March

India’s consumer price inflation eased to a 9-month low of 4.85 per cent in March, according to figures released by the Ministry of Statistics. This brings relief to household budgets as retail inflation approaches the RBI’s mid-term target of 4 per cent, potentially leading to a cut in key interest rates to spur economic growth.

The country’s CPI inflation had stood at 5.09 per cent in February and 5.1 per cent in January. The declining trend in cooking oil prices continued in March with an 11.72 per cent fall, while the price rise in spices slowed to 11.4 per cent. In addition, inflation in pulses slowed to 17.71 per cent during the month.

However, vegetable prices shot up by as much as 28.34 per cent in March, remaining a concern for consumers. The prices of cereals also increased by 8.37 per cent during the month. The consumer price inflation is still above the RBI’s mid-term target of 4 per cent, leading the central bank to refrain from cutting interest rates to stimulate growth.

The RBI is focused on keeping inflation under control for stability, maintaining the repo rate at 6.5 per cent for seven consecutive times in its bi-monthly monetary policy reviews. In its latest review on April 5, the RBI stated its expectation for inflation to decrease to 4.5 per cent in 2024-25, contingent on a normal monsoon this year.

Looking ahead, the inflation trajectory will hinge on the evolving food inflation outlook, with Rabi sowing surpassing last year’s level. The RBI mentioned the continuation of the seasonal correction in vegetable prices, albeit unevenly. The central bank’s cautious approach reflects its commitment to managing inflation while supporting economic growth.


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