Retail inflation eases to 4.85% in March

Consumer inflation data March 2024: Retail inflation in the country, gauged by the Consumer Price Index, eased to 4.85 per cent in March from 5.09 per cent the previous month, official data showed on Friday. 

Food inflation, measured by the CPI Food index, also cooled, coming in at 8.52 per cent last month as against 8.66 per cent in February. 

Retail inflation, also known as consumer inflation, is the rate of increase in the prices consumers pay for a basket of select goods and services. 

The Reserve Bank of India (RBI) tracks consumer inflation data primarily for formulating its monetary policy. 

This month, the central bank's all-powerful Monetary Policy Committee voted 5:1 to leave the repo rate, the benchmark interest rate at which the RBI lends money to commercial banks, unchanged at 6.5 per cent. 

Consumer inflation is a crucial economic indicator that measures the average change over time in the prices paid by urban consumers for a basket of goods and services. The CPI reflects the cost of living for the average household and is essential for assessing price stability and making informed economic decisions. The reading plays a significant role in shaping economic trends and influencing financial decisions at both individual and institutional levels.

Several factors influence consumer inflation, such as supply and demand dynamics, production costs, exchange rates, and government policies. Changes in these variables can lead to fluctuations in prices, affecting the CPI and ultimately impacting consumers' purchasing power.