March inflation seen easing to 4.9%: Mint poll
₹2 per litre last month, while prices of food, especially those of vegetables, are expected to moderate in line with seasonal trends. Additionally, core inflation, which excludes food, and fuel and light groups, is expected to continue its downward trajectory and may come in below the 4% mark for the fourth consecutive month.
However, even with the recent easing, retail inflation is significantly above the central bank’s medium-term aim of 4%. The aim is unlikely to be achieved in the current financial year as well, with the RBI projecting inflation to be 4.5%.
Moreover, volatility in food and crude oil prices could add risk to the inflation outlook, keeping the RBI on the fence about monetary policy easing. In the monetary policy meeting held earlier this month, the monetary policy committee (MPC) chose to keep the policy repo rate unchanged for the seventh consecutive time.
“As the path of disinflation needs to be sustained till inflation reaches the 4% target on a durable basis, the MPC decided to keep the policy repo rate unchanged," it said. Even as the inflation outlook faces risks of uncertainty, resilient economic activity has made a case for a longer pause.
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