As per the government data released on Thursday, retail Inflation in India has eased down for third consecutive month and has marked to be 4.28% in March – compared to 4.4% in February this year; meanwhile, the factory output has lowered from 7.4% to 7.1%.

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Retail or consumer inflation had crippled into Indian market since demonetisation back in November 2016 – however, since last three straight months, the inflations is statistically easing out eventually. As per the government data showed on Thursday, Retail Inflation in India has lowered down to 4.28 percent driven by lower food prices in March – as compared to 4.4 percent in February. The ease out in inflation is pretty close to the forecast made by Reuters for March that it will soften to 4.20 percent from 4.44 percent in the previous month.

The major inflation slowdown was seen in retail food inflation that dropped down from 3.26 percent in February to 2.81 percent in March. Meanwhile, the factory output data which was released the same day showed that industrial production – based on Index of Industrial Production (IIP) rose to 7.1 percent for the month of February, slowing downwardly from 7.4 percent year-on-year rise in January. Also, 8.7 percent growth in manufacturing output sustained above 7 percent growth in IIP for the fourth consecutive month.

This is the result of Reserved Bank of India (RBI), which has mandated achieving the medium-term target for consumer price index (CPI) inflation of 4 percent within the band of +/- 2 points while supporting overall growth. However, analysts remain cautious on inflation given the sharp hike in global crude prices which will spill over transportation charges and most likely add significant number of points to inflation. And it is most likely to happen as the Asian Development Bank in its annual outlook, have said that global oil prices forecast to increase by 19.7% in 2018 to $65 per barrel, which are decontrolled prices for fuels are expected to go up in India.

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