Consumer inflation cools to 3.34% in March from 3.61% in previous month

Domestic consumer inflation eased to 3.34 per cent in March, easing from 3.61 per cent in the previous month, showed official data released on Tuesday.

Measured by the Consumer Price Index (CPI), consumer inflation is the rate of increase in the prices the consumer pays for select goods and services in the country.

The data comes days after the Reserve Bank of India (RBI) lowered its annual inflation projection by 20 basis points to 4.0 per cent while announcing a reduction of 25 basis points in the repo rate, as widely expected.

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The RBI cited “evenly-balanced” risks as the reason behind its inflation forecasts.

It now forecasts consumer inflation at 3.6 per cent in Q1, 3.9 per cent in Q2, 3.8 per cent in Q3 and 4.4 per cent in Q4.

Barring Q3, the RBI Governor-led MPC revised all its quarterly projections for the current financial year, which began on April 1. While lowering its Q1 and Q2 projections by 90 bps and 10 bps, respectively, the panel raised its Q4 projection by 20 bps, data shows.

The central bank tracks consumer inflation readings primarily to make adjustments to its monetary policy.