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The latest government data reveals a notable decline in retail inflation, easing to a three-month low of 5.10% in January. This downturn is primarily attributed to reduced food prices, according to official statistics released on Monday.
In comparison, inflation based on the Consumer Price Index (CPI) stood at 5.69% in December 2023 and 6.52% in January 2024. The trajectory of inflation has witnessed fluctuations, with a peak of 6.83% recorded in August 2023.
The National Statistical Office (NSO) provided insights into the inflation trends, indicating that the inflation rate in the food basket moderated to 8.3% in January 2024, down from 9.53% in the previous month.
The Reserve Bank of India (RBI), mandated by the government to monitor and regulate inflation, operates with the objective of maintaining retail inflation at 4%, with a permissible margin of 2% on either side. As such, the recent moderation in inflation aligns with the RBI’s mandate, albeit still slightly above the desired target.
This decline in retail inflation comes amidst ongoing efforts by policymakers to navigate economic challenges, including supply chain disruptions and global market volatilities. The moderation in food prices, a significant component of the consumer basket, is likely to provide some relief to consumers grappling with the impact of rising costs of living.
Analysts anticipate that the easing inflationary pressures may prompt the RBI to adopt a cautious approach towards monetary policy adjustments. While the decline in inflation is a positive development, policymakers remain vigilant, considering various factors influencing economic stability and growth.
As the economy continues its path towards recovery from the pandemic-induced disruptions, monitoring inflationary trends remains crucial for policymakers to ensure a balanced and sustainable growth trajectory. The government and regulatory authorities are expected to closely monitor inflation dynamics and undertake appropriate measures to support economic resilience and stability.
Sources By Agencies
