India's annual retail inflation in February 2024 was 5.09%, slightly higher than the market's predicted 5.02% and 5.1% in January. Nearly half of all consumer prices are related to food, hence food inflation was 8.66% in January, little higher than 8.3% in January. The comfort coincides with a general slowdown in prices.
Although the official range for retail inflation is between 2% and 6%, authorities are concerned about the volatility of food prices.
Two economists expect that core inflation, which excludes volatile food and energy costs, would be between 3.03% and 3.37% in February, down from 3.6% in January.
It remains higher than the RBI's medium-term aim of 4 percent at this rate. Since the "'last mile' of disinflation...can be sticky," Governor Shaktikanta Das noted in the minutes of the Monetary Policy Committee (MPC) meeting on February 6–8, the central bank is eager to bring it down to the target on a permanent basis.
For the sixth consecutive meeting, the MPC held the repo rate at 6.5 percent on February 8. Even if interest rates in India are at their highest point in almost eight years, analysts believe the economy's ongoing stronger-than-expected growth performance will give the MPC more time to guarantee that inflation, particularly food inflation, declines to manageable levels over time.
