Indian Economy News

In March, consumer price inflation likely eased to a 5-month low of 4.91%

Economists predict India's consumer price inflation likely eased to 4.91% in March, marking a five-month low but exceeding the RBI's 4% target due to persistent food price rises. Despite the gradual decline, concerns over food price volatility persist, especially as these increases have consistently outpaced headline inflation, affecting millions reliant on government food subsidies. The expected downtrend in inflation is attributed to a slowdown in food, fuel, and core item prices, aided by base effects. However, longer-term outlook surveys indicate inflation may surpass the RBI's target in subsequent quarters, with potential supply-side shocks like the onset of a heat wave posing risks to this trend. Although India's economy grew impressively by 8.4% in the October-December quarter, surpassing estimates, the RBI is widely anticipated to implement a rate cut next quarter to bolster economic stability.

Meanwhile, core inflation, excluding volatile food and energy prices, is estimated at 3.27% in March, although official figures for core inflation are not published. The anticipated decline in inflation underscores the delicate balance between managing inflationary pressures and sustaining economic growth, with the RBI's forthcoming rate decision crucial in navigating these dynamics.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.