CPI inflation eases to 4.44% in February 2018; food inflation at 3.26%

India's consumer price index (CPI) or retail inflation stood at 4.44% in the month of February 2018, lower from 5.05% in January 2018, slightly in line with analysts expectations, however the numbers were higher compared to 3.65 in the corresponding month of the previous year.  The consumer food price index (CFPI) stood at 3.26% during the month, lower compared to 4.70% of January 2018, but way higher from 2.01% of year ago same month.  

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, has revised the Base Year of the Consumer Price Index (CPI) from 2010=100 to 2012=100 with effect from the release of indices for the month of January 2015. 

source: tradingeconomics.com

Price data are collected from selected towns by the Field Operations Division of NSSO and from selected villages by the Department of Posts. Price data are received through web portals, maintained by the National Informatics Centre.

Major indicators of CPI eased down in the February 2018 month, with food & beverages at 3.38%, pan, tobacco & intoxicants at 7.34%, clothing & footwear at 5%, housing at 8.28%, fuel & light at 6.68% and miscellaneous at 3.85%.

Housing inflation continues to remain key concern for India’s CPI inflation. 

The Reserve Bank of India (RBI), which takes into consideration the inflation indicator for deriving it's position on India's monetary policy stance, had increased the CPI target for Q4FY18. 

RBI in this policy stated that the December bi-monthly resolution projected inflation in the range of 4.3-4.7% in the second half of 2017-18, including the impact of increase in HRA. In terms of actual outcomes, headline inflation averaged 4.6% in Q3, driven primarily by an unusual pick-up in food prices in November. 

RBI said, "Though prices eased in December, the winter seasonal food price moderation was less than usual. Domestic pump prices of petrol and diesel rose sharply in January, reflecting lagged pass-through of the past increases in international crude oil prices."

Considering the above mentioned factors, RBI now estimate inflation to be at 5.1% in Q4, including the HRA impact.

Stewart Mackertich expected CPI for February 2018 month to come in at 4.74%. 

Teresa John analysts at Nirmal Bang expected, CPI inflation for February 2018 to come in at 4.9%, down from 5.1% in the previous month.