On March 12th, 2024, the Ministry of Statistics and Programme Implementation unveiled the Consumer Price Index (CPI) data for February revealing that CPI stood at 5.09%. This figure indicates a marginal decrease from January’s 5.10%.
The data shows sustained stability in Inflation with the CPI staying within the Reserve Bank of India (RBI) tolerance range of 2-6% for the sixth consecutive month.
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What is the Consumer Price Index (CPI)?
The CPI serves as a vital metric for inflation assessment, and fluctuations traction in the prices of commonly purchased goods and services. This includes essentials such as food, housing, apparel, transportation, electronics, medical care and education.
Projections vs. Reality
Before the release of CPI index data, a CNBC-TV18 poll had projected February’s CPI at 5.12%, slightly above the actual figure. Notably, this marks a decrease from the preceding month, which recorded a three-month low of 5.1%. In contrast to this, December saw a spike in inflation, reaching a four-month high of 5.69%.
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Core CPI and Market Insights
The core CPI for February stood at 3.37%, representing a decline from January’s 3.6% and marking the lowest since November 2019. Expectations had placed core inflation slightly higher, at 5.12%. Akhil Mittal, Senior Fund Manager-Fixed Income at Tata Asset Management, commented on the data, emphasizing the significance of food inflation which rose to 8.66%, up from 8.3% in January.
With inflation hovering within the RBI’s comfort zone, the central bank is likely to tread cautiously, emphasizing stability while closely monitoring the evolving economic landscape. Despite short-term fluctuations, the overarching objective remains to anchor inflation at sustainable levels to foster economic growth and stability.
