News

Published: Mar 15, 2023
Updated: Mar 15, 2023

India's February CPI Inflation Falls Slightly to 6.44%, But Still Higher Than Expected

India's consumer price index (CPI) for February 2023 showed a slight drop in inflation to 6.44%, down from 6.52% in January. However, this figure is still higher than street estimates of 6.29%, according to data published by the Ministry of Statistics and Programme Implementation.

Food Prices inflation slows down slightly despite drop in potato-onion prices:

Food price inflation was down slightly to 5.9% compared to 6% in January, despite a drop in onion and potato prices. Cereal prices were up 16.73%, while milk prices came in at 9.65%.

Rural and Urban Inflation:

Rural inflation stood at 6.72%, while urban inflation came in at 6.10%. In January, rural inflation was 6.85%, while urban inflation was 6%.

Core Inflation:

The core inflation rate for February remained unchanged at 6.1%, the same as the previous two months, and higher than the predicted rate of 6.05%.

Experts say " Removal of free foodgrains from CPI may give higher inflation rates"

Rupa Rege Nitsure of L&T Finance Holdings stated that inflation could be higher than expected due to the removal of free foodgrain from the CPI. Aditi Nayar of ICRA suggested that with two consecutive months of CPI prints above 6%, there may be another interest rate hike by the RBI's MPC.

More steps needed to curb inflation

While the slight drop in inflation may be seen as a positive sign, it is still higher than predicted, and experts are warning of further interest rate hikes. The Indian government will need to monitor inflation carefully to ensure it doesn't impact economic growth.