CPI inflation in February eases to 5.09%; veggies still on fire at 30%

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CPI Inflation has dropped for the second month in a row to 5.09 per cent in February 2024. Inflation has now fallen to four-month low levels in the said month. Rural inflation has fallen to 5.34 per cent. While, urban inflation has corrected to 4.78 per cent. Retail Inflation has remained lower than RBI’s upper limit of tolerance band of six per cent for last six straight months now.

February 2024 inflation print has corrected on the back of slowdown in price growth of pulses, cereals, fruits, milk and spices. While, stagnant fuel and light and oil and fats inflation have also helped keeping retail inflation subdued.

Pulses and products inflation after remaining at high levels last year, eased a bit to 18.90 per cent in February 2024.

Spices inflation had also remained in double digits last year. Although, in February 2024, CPI Inflation print for spices fell to 13.51 per cent.

Similarly, cereals and products inflation after being a headache for government for quite a long time, has finally started to show correction off-late. It has now continuously fallen since August 2023. Cereals and products inflation fell for seventh straight month in February 2024 to 7.60 per cent.

Fruits inflation after increasing continuously from June 2023 to December 2023, finally showed some correction in last two months as it fell to 4.83 per cent in February 2024.

On the back of subdued international crude oil prices, fuel and light inflation came in negative territory at (-) 0.7 per cent in the month under consideration. While, oil and fats inflation print came in at (-) 13.97 per cent.

February 2024 vegetable inflation at 30.25 per cent:

But vegetable prices remain a headache for the government. Despite several steps taken by the government to contain prices, vegetable inflation has risen to worrisome levels of 30.25 per cent in February 2024. While, food inflation jumped to 7.76 per cent in the same month.

High vegetable inflation has come at a time when the RBI governor Shaktikanta Das had warned that high food prices remain a threat for the government. Going forward whether inflation will be high or low it will very much depend on food prices. He had said “large and repetitive food price shocks” can be one of the biggest threat to ongoing disinflationary trend.

Bad news for non-vegetarians:

Meat and fish inflation had largely remained muted in 2023. But with the advent of the new year, meat and fish inflation started to show signs of pick up as it has increased continuously for last two months and came in at 5.21 per cent in February 2024. While, egg inflation increased in double digits for the first time in more than last one year and came in at 10.69 per cent in the month under consideration.