India's consumer price inflation jumps to 2.57% in February

Lloyd Doyle
March 14, 2019

Retail inflation stood at 1.97 per cent in January and 4.44 per cent in February 2018.

The retail inflation, based on the consumer price index (CPI), rose by 2.57 per cent in February 2019 as compared to the corresponding period a year ago, said the data issued by the government on Tuesday.

Excluding the volatile food and energy components, the CPI edged up 0.1%, the smallest increase since August 2018.

Economists had forecast a 0.2% gain in the monthly core gauge and a 2.2% annual advance. Core prices were up 2.1% on the year, a pace last matched in October.

Gasoline prices surged 1.5 percent in February, but they're 9.1 percent lower from past year.

The means the Fed is even more likely to hit the pause button on additional interest rate hikes for the rest of 2019.

"That is partly because a modest pick-up in productivity growth has kept a lid on unit labor costs and partly because the rising dollar has started to put downward pressure on imported goods prices", said Paul Ashworth, chief US economist at Capital Economics in Toronto. The core CPI had increased by 2.2 per cent for three consecutive months on an annual basis. Food consumed at home rose 0.4 per cent last month, boosted by more expensive dairy products, fresh vegetables, cereals and meat. Such figures give President Donald Trump another opportunity to claim credit for lower pharmaceutical prices, an issue that he's recently tweeted about several times.

Retail inflation climbs to 2.57%, factory output decelerates to 1.7%
Industrial growth slows down to 1.7%, retail inflation rises to four-month high

The Ministry of Statistics and Programme Implementation (MOSPI) released two sets of key data on Tuesday.

The retail inflation based on Consumer Price Index (CPI) stood at a 19-month low of 1.97 per cent in January and 4.44 per cent in February 2018. The price index for food rose 0.4%. Food costs were up 0.4 percent, their largest monthly increase since May 2014, as both the food at home and food away from home indexes increased.

Some economists expect inflation to pick up as the benefits of higher wages flow through the economy. The central bank also changed its policy stance from "calibrated tightening" to "neutral".

Inflation pressures for core services remained steady, up 0.2% in February.

The annual inflation measure has been steadily declining since July. That index tends to run slightly below the Labor Department's CPI, and January figures are due March 29.

The public's inflation expectations fell in February, according to the Federal Reserve Bank of New York's latest Survey of Consumer Expectations. It hit the USA central bank's 2 percent inflation target in March previous year for the first time since April 2012.

Still, there are signs some inflationary pressures are stirring.

Other reports by Iphone Fresh

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