India's February CPI inflation at 5.09%, core inflation drops further to 3.3%

As per the RBI’s latest forecast, headline retail inflation is seen averaging 5.0 percent in the first quarter of 2024.

India's headline retail inflation rate was largely unchanged at 5.09 percent in February, according to data released by the Ministry of Statistics and Programme Implementation on March 12.

The Consumer Price Index (CPI) inflation print in January was 5.10 percent.

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At 5.09 percent, the latest headline retail inflation figure is as per expectations, with economists having predicted prices likely rose 5.1 percent year-on-year according to a Moneycontrol survey.

While CPI inflation has extended its stay inside the Reserve Bank of India's (RBI) tolerance range of 2 percent to 6 percent to a sixth consecutive month, it has now spent 53 months in a row above the medium-term target of 4 percent.

The latest inflation data comes weeks before the RBI's Monetary Policy Committee (MPC) meets again on April 3-5. On February 8, the rate-setting panel left the policy repo rate unchanged at 6.5 percent for the sixth meeting in a row.

According to the central bank's latest forecast, CPI inflation is seen at 5.0 percent in the current quarter before easing to 4.0 percent in July-September. However, it is then set to rise to 4.7 percent in the first quarter of 2025.

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While India's policy rates are at their highest level in nearly eight years, economists think the continued better-than-expected growth performance of the economy could mean the MPC takes its time to ensure inflation falls to acceptable levels on a durable basis.

February CPI internals