Inflation eases to 9-month low of 4.7%

New Delhi, March 15 – The inflation rate slowed to a nine-month low of 4.7% in February as prices of vegetables eased significantly in yet another sign of waning inflationary pressures in the economy.

Economists said this may enable the Reserve Bank of India (RBI) to ease rates in the months ahead to boost growth, which is estimated to have slowed to 4.9% in the current fiscal. But, some economists said the central bank may prefer to hold rates when it reviews monetary policy in April.

Data showed the annual rate of inflation, based on wholesale price index (WPI), stood at 4.68% in February compared to 5.05% for the previous month and 7.28% during the corresponding month of the last year.

The moderation in WPI inflation comes close on the heels of easing in retail inflation, which slowed to a 25-month low of 8.1% in February. The government revised upwards the data for December to 6.4% from the previously reported 6.2%.

Vegetable prices rose 3.9% year-on-year in February, slower than previous month's 16.6% increase. Food inflation, which has been a source of constant worry for policymakers, rose 8.1% in February, slower than previous month's 8.8% and lower than the double digit rates in the past few months.

But, some economists said they expect some upward pressure on food prices due to unseasonal rains in some part of the country and RBI is likely to remain on a pause mode on rates.

 

TOI