Consumer Inflation Picks Up To 2.86% In March

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    Consumer inflation stood at 2.86 per cent in March, government data showed on Friday. That marked picking up of consumer inflation to the previous month, in which retail inflation had come in at 2.57 per cent, according to the Ministry of Statistics statement. Retail inflation – or the rate of increase in consumer prices – was worse than economists’ expectation of 2.80 per cent on slightly higher food prices, according to a poll by news agency Reuters. Friday’s official data also showed retail inflation has remained within the central bank’s medium-term target for the eighth month in a row.

    The Reserve Bank of India (RBI) has set a medium-term target of 4 per cent for consumer inflation, which is determined by Consumer Price Index.

    The RBI, which tracks consumer inflation primarily to formulate its monetary policy, earlier this month announced its decision to reduce the repo rate by 25 basis points to 6 per cent – a level last seen in May 2018.

    The latest inflation data reinforces economists’ expectation of more monetary easing this year. The rate cut announcement in the first bi-monthly monetary policy statement of the current financial year came on the back of a similar reduction in February this year.The RBI also lowered its retail inflation forecast to 2.9-3 per cent for the first half of current fiscal year, mainly due to lower food and fuel prices as well as expectation of a normal rainy season.

    Separate data showed that growth in factory output plunged to less than 0.1 per cent in February. Gauged by the Index of Industrial Production (IIP), the factory output had stood at a downwardly revised 1.44 per cent in the previous month, the statistics ministry said in its statement.

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