Retail inflation in India dropped further in January on falling food and fuel prices. The inflation rate for services like education and health also fell.
Retail inflation stood at 2.05 percent in January 2019 compared with a revised 2.11 percent in December 2018, according to data by the Ministry of Statistics and Program Implementation. A Bloomberg poll of 38 economists had estimated inflation at 2.5 percent for January 2019.
At just above 2 percent, CPI inflation is now at the lower bound of India’s inflation target of 4 (+/-2) percent. The lower-than-expected inflation prompted the Monetary Policy Committee to cut interest rates by 25 basis points for the first time in 18 months last week.