Even before Holi, the country has got a great news. India’s retail inflation rate has reached a 7 -month low in February 2024. Based on the Consumer Price Index (CPI), this rate was 3.61 percent in February, which is 0.65 percent less than in January. This figure is the lowest since July 2024 and the main reason is the fall in food prices.
Food inflation declines
Food inflation has reached the lowest level after May 2023 in February. This is 222 basis points less than in January. The fall in prices of vegetables, eggs, meat-fish, pulses and milk and milk products has played an important role in this decline.
The most declining items
Ginger (-35.81 percent)
Cumin (-28.77 percent)
Tomato (-28.51 percent)
Cauliflower (-21.19 percent)
Garlic (-20.32 percent)
Relief in fuel prices also
Fuel prices also saw a decline in February, which reduced the pressure on the domestic budget. Fuel inflation was -1.33 percent, ie prices decreased.
Good news for RBI
Due to the steady decline in retail inflation and being below the RBI target of 4 per cent, the central bank has now got more scope to cut interest rates (REPO RATE) to speed up economic growth and increase employment. RBI Governor Sanjay Malhotra announced a cut of 25 basis points in the policy rate in the review of Monetary Policy last month. Now the repo rate is 6.25 percent. He said that inflation has continued to fall and it will reduce further to the RBI’s 4 percent target.
Balance of monetary policy
RBI’s Monetary Policy Committee (MPC) has decided to maintain a balance between control over inflation and economic growth. MPC has decided to continue ‘Neutral Stance’ in its policy, which will support development while monitoring inflation.
What is the strategy ahead?
The RBI Governor said that this policy would provide flexibility to react according to macroeconomic conditions. This means that if the inflation rate comes further, then the RBI and the rate can cut the rate, which will boost the economy.
What do experts say?
Experts believe that the fall in inflation will not only provide relief to the common people, but it can also increase investment and consumer expenditure. This is a positive sign for the economy.
Also read: Storm will come in Sensex, Morgan Stanley made a big prediction about Indian stock market
(Tagstotranslate) Retail inflation rate
Source link
