NEW DELHI: India’s consumer prices rose at a faster pace than anticipated in February, and remained below the central bank’s target for a seventh straight month, lending weight to expectations that the bank could again cut the key interest rate in April.
Country’s annual retail inflation picked up in February to 2.57 per cent, after easing to a downwardly revised 19-month low of 1.97 per cent in January, government data showed on Tuesday.
Analysts polled by Reuters had forecast February’s annual increase in the consumer price index at 2.43 per cent.
February’s marginal increase in inflation stemmed from higher costs of housing, health, education services and fuel.
Health and education costs rose more than 8 per cent in February from a year earlier, the data showed.
Economists say inflation remains subdued because of high unemployment and declines in rural incomes following a fall in food prices and in demand for exports.
The unemployment rate rose to 7.2 per cent in February, the highest since September 2016, and up from 5.9 per cent in February 2018, according to data compiled by the Centre for Monitoring Indian Economy.
Rupa Rege Nitsure, chief economist at L&T Finance Holding in Mumbai, said weak food inflation would keep rural demand subdued and would gradually bring down core inflation.
Figures released separately on Tuesday showed annual industrial output growth rose 1.7 per cent in January compared with an upwardly revised 2.6 per cent the previous month.
Economic growth slowed to a five-quarter low of 6.6 per cent in October-December, and the government estimate for the financial year ending this month has been revised down to a five-year low of 7 per cent from 7.2 per cent.
On April 4, the Reserve Bank of India’s Monetary Policy Committee (MPC) is widely expected to cut the benchmark repo rate for the second straight meeting. — Reuters
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