CPI Inflation Cools Marginally in February, Stays Over 6% For Second Straight Month: CareEdge

Cereals and milk keep food inflation elevated.
<div class="paragraphs"><p>A vegetable vendor, speaks on his mobile phone at a retail market area in Kolkata, India. (Source: Reuters/Rupak De Chowdhuri)&nbsp;</p></div>
A vegetable vendor, speaks on his mobile phone at a retail market area in Kolkata, India. (Source: Reuters/Rupak De Chowdhuri) 

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CareEdge Research Report

Consumer Price Index inflation cooled only marginally in February to 6.4%, remaining above the Reserve Bank of India’s upper threshold for a second straight month.

The headline inflation print was higher than our expectation (6%). Food inflation continued to be the main driver with its contribution to overall inflation rising to 45%.

Despite the government’s effort to provide additional supplies of wheat in the open market to cool prices, cereals inflation continued in double digits.

Additionally, the strengthening of price pressures in non-food categories such as housing, household goods and services and health kept core inflation elevated at 6.3%.

The persistence of core inflation above 6% is concerning and reinforces the expectation of another round of a 25-basis points rate hike in the upcoming monetary policy meeting.

For rural consumers, inflation fell marginally to 6.7%. Despite the moderation, rural CPI has remained above 6% for the 14th month in a row.

For urban consumers, inflation inched upwards to 6.1% from 6% in January owing to higher food and housing inflation.

Click on the attachment to read the full report:

CareEdge Retail Inflation February 2023.pdf
February CPI Inflation At 6.4% Inline With Expectations: Motilal Oswal


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