Retail Inflation rises at 3.81% in March 2017
Consumer Price Index (CPI) inflation or retail inflation for the month of March 2017 stood at 3.81%, said Ministry of Statistics and Programme Implementation (MOSPI) on Wednesday.
In the month of February, CPI stood at 3.65% raising for the first time in seven months from 3.17% in January.
The combined CPI in March was 3.81% as against 3.65 in February and 4.83% in the month of March, 2016. The rural CPI was at 3.75% in the month of March as compared to 3.67% in February and 5.70% in March, 2016. The urban CPI was at 3.88% in March as against 3.55% in February and 3.95% in March, 2016.
The Consumer Food Price Index (CFPI) combining Rural and Urban in the month of March dropped to 1.93% as against 2.01% in the month of February and 5.21% in March, 2016. As per the data, the rural CFPI in March was 1.85% as against 2.08% in last month and 5.79% in March, 2016. The urban CFPI in the month of March was 2.27% as compared to 1.87% in February and 3.98% during the same period last year.
Indicating risk further over inflation, RBI surprised investors in its first monetary policy for FY18, by increasing reverse repo rate by 25 basis points to 6% from 5.75%. The central bank kept policy rate unchanged at 6.25%.
RBI expected headline CPI inflation to undershoot the target of 5% for Q4 of 2016-17 in view of the sub-4 per cent readings for January and February. For 2017-18, inflation is projected to average 4.5% in the first half of the year and 5% in the second half.
According to the Reuters poll, India's inflation was seen climbing and touching distance of the Reserve Bank of India`s (RBI) 4% medium-term target in March, driven by higher food costs.
Nikhil Gupta, Madhurmi Chowdary analysts at Motilal Oswal had said, “It implies that CPI inflation averaged 4.6% in FY17 YTD (until February), as against 4.9% in the year-ago period. We expect headline inflation to remain below 4% in March too, implying inflation at 4.5% in FY17, lower than 4.9% in FY16.”
ICRA expected the CPI inflation to rise to above 4.5% in March 2017, as the base effect continues to unwind and prices of perishables track a seasonal uptrend, while remaining below the RBI’s forecast of 5%.