India’s February retail inflation accelerates to 3.21% y/y

NEW DELHI: India’s retail inflation rose 3.21% year-over-year in February from a revised 2.74% in January on higher food prices, government data showed on Thursday.

A Reuters poll had projected retail inflation at 3.1%.

The key price gauge stayed below the Reserve Bank of India’s target of 4% and within its tolerance band of 2%-6%.

A Reuters poll had projected inflation at 3.1%, in what was the second print under a revised data series that seeks to capture changing consumption patterns in the world’s most populous country.

Food inflation was at 3.47% year-on-year in February as compared with 2.13% a month ago.

The ongoing war in the Middle East, which sent crude prices soaring to four-year highs, could push up inflation in India, the world’s third-largest oil importer.

India’s January retail inflation at 2.75% in first print under new data series

Indian companies have raised prices of cooking gas for the first time in about a year.

Finance Minister Nirmala Sitharaman said earlier this week that India does not expect a sharp rise in inflation as domestic price levels remain near the lower end of the central bank’s tolerance band of 2% to 6%.

However, a government report released last week said that a prolonged Middle East conflict could weaken the rupee and widen India’s current account deficit.

Oil prices soared over $119 a barrel earlier this week, the highest intraday prices since June 2022, but hopes of the war de-escalating and the International Energy Agency’s decision to release a record 400 million barrels of oil from strategic stockpiles has brought down prices of the commodity.