India’s Inflation Quickens as Focus Shifts to April Rate Cut

(Bloomberg) -- India’s inflation rebounded in February, but was still benign enough to support calls for the central bank to lower interest rates at next month’s monetary policy meeting.

Consumer prices rose 2.57 percent last month from a year earlier, the Statistics Ministry said in a statement on Tuesday. That compares with the 2.4 percent median estimate in a Bloomberg survey of 34 economists.

Key Insights

What Economist Says

  • Ria Modh, an analyst with Stci Primary Dealer Ltd. in Mumbai, said calls for a rate cut in April will still be strong because of a revision in January inflation number to 1.97 percent, which is way below RBI’s target range. “If they need an investment demand, RBI needs to create an atmosphere where investment is boosted.”

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  • Consumer food prices fell 0.66 percent
  • Fuel and light prices rose 1.24 percent
  • Housing prices rose 5.10 percent
  • Clothing and footwear prices rose 2.73 percent
  • India’s factory output rose 1.7 percent in January, slower than the 2.4 percent gain in the previous month, data released separately showed
  • India is due to release wholesale price inflation numbers Thursday

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