Inflation pinches Bharat: Rural retail inflation rises to 6.4% in February

Rural retail inflation rose to 6.4% in February from 5.8% in December. In comparison, urban CPI moderated to 5.8% from 5.9%.

While core CPI (ex food, fuel) moderated to 5.8% y-o-y from 6% in January, a Nomura analysis shows that, on a 3-month moving average basis, core goods CPI inflation was higher in February (at 6.5%) than January’s 6.4% and core services (ex-housing) inflation rose to 5.6% from 5.4%, suggesting passing on of input costs.

CPI will likely be ~6-6.2% in March, as retail fuel prices are likely to rise.