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Retail Inflation
Why is it in the news?
- Retail inflation, based on Consumer Price Index (CPI), increased to a four-month high of 2.57% in February on the back of rise in prices of non-food items even as food inflation continued to remain in the negative zone.
More about the news
- Inflation in food and beverages sector stood at -0.07% in February compared with -1.29% in January.
- The upward movement was driven primarily by a sequential rise seen in various food groups, except in vegetables.
- Core inflation moved down slightly as expected, reflecting easing of input costs, pricing powers and growing slack in the economy.
- The earlier spikes seen in rural health and education seem to have stabilised.
- With inflation remaining below RBI’s target, inflationary expectations declining and growth profile weakening, RBI may front-load its monetary easing in the beginning of FY20.
Concept
- The Retail Inflation measures changes in the price level of a 'market basket' of consumer goods and services purchased by households.
- The headline inflation measure demonstrates overall inflation in the economy.
- Conversely, the core inflation measure strips the prices of highly volatile food and fuel components to distinguish the inflation signal from transitory noise.
Source
Indian Express.