Photo has been used for representation purpose only. file | Photo Credit: Sushil Kumar Verma
According to the National Statistical Office, India’s retail inflation remained above the central bank’s 6% tolerance limit for the second consecutive month at 6.44% in February, unchanged from 6.52% in January.
The price hike faced by urban consumers increased from 6% in January to 6.1% in February, while it declined marginally for rural consumers from 6.85% to 6.72% in February.
Food inflation remained stable with the consumer food price index rising to 5.95% in February, marginally lower than the 6% recorded in January.
Prices remained in deflation territory for the third consecutive month, falling 11.6% from last year’s levels this February, compared to an 11.7% decline in January.
But the prices of many other food items continued to rise. Inflation in cereals rose to 16.73% from 16.1% in January, milk products rose to 9.65% from 8.8% in February, and inflation in spices remained above 20% for the third month in a row.
Inflation in fruits rose to 6.4% in February from 2.9% in January, while the price of prepared meals, snacks and sweets rose to 8% from 7.8% in February.
Inflation in eggs eased to 4.3% from 8.8% in January, while the pace of price rise in meat and fish also slowed to 3.4% from 6%. Oil and fat prices fell 0.5% last month from February 2022 levels, compared to an increase of 1.41% in January.
Prices of fuel and light, clothing and footwear, personal care and effects, along with other items of household consumption, remained unchanged as inflation remained in the range of 9% to 10%. There was little change in the trend of inflation along with the cost of miscellaneous goods, household goods and services, health and education, which remained in the range of 6% to 7.5%.
Among major states, those with the highest inflation rates remained unchanged from January. Telangana recorded the highest inflation of 8.56% in February, followed by Andhra Pradesh (8.01%), Madhya Pradesh (7.65%), Uttar Pradesh (7.12%) and Haryana (6.97%).
At least ten of the 22 states released on Monday reported higher inflation than the national average of 6.44%, including Tamil Nadu (6.86%), Rajasthan (6.78%) and Maharashtra (6.72%).
“The February inflation print is closer to January figures and we expect March inflation to remain above 6%, hence RBI expects to hike repo rate by 25 basis points in April monetary policy review. There is a strong case. Madan Sabnavis, Chief Economist, Bank of Baroda said. One basis point is equal to 0.01%.
Food inflation will remain a concern as the heat wave casts a shadow over wheat crop prospects, while milk inflation has climbed to 9.7%, he added. “Milk prices have been raised frequently this year – at least three times to accommodate higher fodder costs. These prices will never come down,” cautioned Mr. Sabnavis.