Consumer price index (CPI)- based inflation, which hit a 17-month high in December at 5.2% in December, cooled down a bit in January at 5.07%. In the same period previous year, the rate was 0.61 percent.
Retail inflation declined to 5.07 per cent in January due to easing prices of vegetables, fruits and fuel components, an official data showed today.
"Inflation numbers for January are modestly lower mainly due to moderating food, while higher oil and rent allowance limit a larger correction in price pressures".
Analysts polled by Reuters had predicted January's rate would ease to 5.14 percent from 5.21 percent in December.
The central bank has raised its inflation forecast to 5.1 percent for the January-March quarter, compared with 4.6 percent for October-December, citing price pressures from higher import taxes announced in the budget on February 1, pushing up food and fuel prices.
The Reserve Bank of India (RBI) on Wednesday kept interest rates unchanged and warned that inflation risks were skewing upwards. I do not expect a rate hike for the next five to six months.
Consumer food price inflation, a metric to gauge changes in monthly kitchen costs, softened marginally, with prices rising 4.70 percent in January from 4.96 percent in December 2017.
The data released by the Central Statistics Office (CSO) showed that the rate of price rise for consumer foods eased to 4.7 percent in January, from 4.96 percent in December.
Last week, the central bank's monetary policy committee (MPC) said that India's inflation outlook is clouded by several uncertainties on the upside.
"Apart from oil prices, monsoons will be the key factor for inflation".
The sobering of inflation came on back of fall in prices of vegetables and pulses.
Meanwhile, the general index for the month of December 2017 stood at 130.3, which is 7.1 percent higher as compared to the level in the month of December 2016.
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