CPI inflation eased to 8.1% in February’14 - within reach of RBI’s target of 8% by January’15
India’s retail price inflation, indicated by Consumer Price Index (CPI), softened again in February and came in at 8.1% yoy (year-over-year) from 8.8% in January’14 and 9.9% in December’13. It was lower than the consensus expectation of 8.3%. CPI inflation came down by a whopping 3% points in three months from 11.2% in November 2013 driven entirely by lower food prices, particularly vegetable prices. Vegetable prices usually soften in winter and as expected, their rate of increase which was 61% yoy in November 2013, softened to 14% in February 2014. In addition to vegetables, prices of sugar and edible oil also fell on monthly basis and that helped lower overall food price inflation to 8.6% in February from 14.5% in November 2013.