Retail Inflation Hits 5-Month Low at 4.85% in March, Food Prices Decline

New Delhi: India’s Retail inflation dropped to a five-month low of 4.85% in March, mainly due to a decrease in food prices, as per official data released on Friday. The Consumer Price Index (CPI) showed a decline from 5.09% in February to 4.85% in March, and it was 5.66% in March 2023. Notably, the lowest CPI-based inflation was recorded at 4.87% in October 2023.

While the overall inflation rate has shown improvement, food prices remain a concern. The data indicates an 8.52% inflation in the food basket for March, down marginally from 8.66% in February.

The government has set a target for the Reserve Bank to maintain inflation at 4%, with a margin of 2% on either side.

The Reserve Bank considers consumer inflation while determining its bi-monthly monetary policy. It notes that uncertainties in food prices continue to impact the inflation trajectory. The central bank’s projection for retail inflation is 4.5% for the current fiscal year, assuming a normal monsoon. Additionally, ongoing geopolitical tensions pose risks to commodity prices and supply chains.

The RBI forecasts inflation at 4.9% in the April-June quarter and 3.8% for the September quarter.