Consumer Inflation Eases To 6.58% In February

The inflation data showed retail inflation remained way above the Reserve Bank of India's medium-term target of 4 per cent for the fifth month in a row. Food inflation eased to 10.81 per cent last month, from 13.63 per cent in January, the official data showed. Separate data showed that industrial production or factory output - gauged by the Index of Industrial Production (IIP) - grew 2.0 per cent in January, better than economists' estimate of 0.7 per cent, and in contrast to a 0.3 per cent contraction in the previous month. Though consumer inflation is still outside the RBI's comfort zone, the fast-spreading coronavirus pandemic may force the central bank to ease monetary policy further, say economists. “CPI inflation came in weaker than expected, largely given lower food prices... The RBI is likely to throw caution in the wind and could even move inter-meeting as uncertainty is rising," said Rahul Bajoria, chief India economist, Barclays. The latest data comes within two weeks of the government releasing its estimate of GDP or gross domestic product in the third quarter of current financial year. The country's GDP expanded at a new six-year low pace of 4.7 per cent in October-December, according to official data. The government has however said that the growth rate appears to have bottomed out and "green shoots" are visible in the economy. It has set an ambitious target of making India a $5-trillion economy by 2024. For the full financial year, which ends on March 31, the Centre has pegged an expansion rate of 5 per cent - the slowest since the 2008-09 global financial crisis. Despite a total reduction of 135 basis points (1.35 percentage point) last year, economic growth remained at a six-year low of 4.7 per cent in the October-December quarter. Last month, the central bank had in its bi-monthly review kept the key rates unchanged at existing levels while maintaining the status quo on its "accommodative" policy stance. Analysts expect a further deceleration in Asia's third largest economy as the coronavirus pandemic looms over world economy. More than 100,000 people have been infected by the virus around the globe, and 73 in India.

Consumer Inflation Eases To 6.58% In February

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