Consumer inflation edged up in February for the third straight month, mainly driven by food prices, underscoring the risk of a rebound in inflationary pressures from rising commodity prices.
The data comes ahead of Reserve Bank of India’s monetary policy meeting on April 7 and a week after the central bank cut interest rates by 25 basis points for the second time this year, acknowledging a deficit cutting road map set by the government in the 2015/16 budget.
But consumer prices rose more than expected to 5.37 percent in February, compared with an upwardly revised inflation reading of 5.19 percent in January. Food inflation rose to 6.79 percent in February compared to 6.06 percent in the previous month, the statement by Ministry of Statistics showed.
Finance Minister Arun Jaitley, who presented his first full-year budget last month, has set a growth target of 8.5 percent for the 2015/16 financial year beginning in April and inflation at 5 percent by the end of March.
India’s economy is projected to expand at 7.4 percent in the current fiscal year, its fastest pace in three years based on the new GDP series estimates.
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