India's retail inflation rises marginally to 6.07% in Feb

According to the data released by the NSO, the rate of price rise in the food basket was 5.89% in February, up from 5.43% in the preceding month

Retail inflation inched up to 6.07% in February mainly due to an uptick in food prices, remaining above the tolerance limit of the central bank for a second month in a row, showed the government data released on Monday.

The Consumer Price Index (CPI) based retail inflation was 5.03% in February 2021 and 6.01% in January this year.

According to the data released by the National Statistical Office (NSO), the rate of price rise in the food basket was 5.89% in February, up from 5.43% in the preceding month.

The Reserve Bank of India mainly factors in the CPI-based inflation while arriving at its bi-monthly monetary policy.

"Inflation printed at 6.07% in February, slightly higher than our estimates. This print, although does not reflect the increase in commodity prices due to Russia-Ukraine crisis. We expect inflation to rise further above 6% in March. For FY23, if oil prices average at $110 pbl in Q1 and moderate thereafter, inflation could still average at 5.7% in the year, taking into account the direct and indirect impact. That said, we do not expect the RBI to change its stance or policy rate at its April meeting," said Sakshi Gupta, senior economist, HDFC Bank.

Asia's third-largest economy expanded 5.4% in the October-December quarter, slower than the 6% predicted by economists in a separate Reuters poll.

Focusing on growth, not inflation, the Reserve Bank of India has held its interest rates steady at record lows for nearly two years but is due to increase borrowing costs next quarter.

ndustrial production expanded by 1.3% in January on an annual basis, mainly on account of improved performance of mining and manufacturing sectors, official data showed on Friday.

The Index of Industrial Production (IIP) had contracted by 0.6% in January 2021.

The wholesale price-based inflation in February rose to 13.11% on hardening of prices of crude oil and non-food items, even though food articles softened.

After two months of mild easing, WPI inflation accelerated in February and remained in double digits for the 11th consecutive month, beginning April 2021.

WPI inflation last month was 12.96%, while in February last year, it was 4.83%.

The rise in crude oil and natural gas prices after the Russian invasion of Ukraine, beginning February 24, has put pressure on the wholesale price index,