Consumer inflation in February edged up for the third straight month, rising 5.3 per cent from last year, on higher food prices, government data showed on Thursday. Consumer prices were upwardly revised to 5.19 per cent in January.
A Reuters poll of economists had estimated consumer prices to rise 5.2 per cent in February.
"CPI (consumer price index inflation) is broadly in line with expectations. Food inflation seems to be bit higher than what we anticipated. But that does not change the trajectory of overall inflation going ahead and we think the RBI's goal of 6 percent by January will be achieved.
"We still expect RBI to cut the repo rate by 25 basis points by June before pausing. It is better not to come to conclusion on IIP (industrial output) data as this data will undergo a change in a few months," A Prasanna, Economist, ICICI Securities Primary Dealership, Mumbai
Despite the acceleration of inflation in February, it is still below Reserve Bank of India or RBI's target of 6 per cent for January 2016.
A plunge in global oil prices and weak consumption have driven down inflation to around 5 per cent from double digits in 2013, giving room to the RBI to cut interest rates twice so far this year to spur growth.
Industrial output growth slowed to 2.6 per cent in January from December's upwardly revised figure of 3.2 per cent.
Industrial production in January saw a 3.3 per cent rise in manufacturing and 2.7 per cent increase in electricity output. But output in mining sector contracted 2.8 per cent.
Analysts expected industrial output growth in January at 0.65 per cent.
India formally adopted inflation targeting in February, a historic monetary policy overhaul. The government and the central bank set a consumer inflation target of 4 per cent from next year, with a band of plus or minus 2 percentage points.
(With Reuters inputs)
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