Retail Inflation Eases To 4.28% In March; Factory Output Grows 7.1%
Annual consumer price inflation was expected to have softened to 4.20 per cent in March, according to a Reuters poll of economists. Last week, the Reserve Bank of India (RBI) kept its repo rate - the key rate at which it lends to banks - on hold last week and sharply cut its projection for price rises from April through September.
The Monetary Policy Committee (MPC) lowered its inflation forecast for April-September to 4.7-5.1 per cent from 5.1-5.6 given at the February meeting.
However, analysts remain cautious on inflation given the sharp hike in global crude prices. An increase in MSP of agricultural produce, hike in allowances to employees of state governments, high government spending ahead of elections and pass-through of the past increase in commodity prices are all likely to add to the inflationary pressure, said Teresa John, economist at Nirmal Bang.
Economists expected factory output growth at 7 per cent in February. Infrastructure output, which comprises eight core industries and accounts for nearly 40 per cent of total industrial production, grew 5.3 per cent in February from a year ago.