![India's Inflation Eases, Posing Challenges for Policymakers](https://www.forexbrokersreview.org/img/e9911c20-6993-4005-9faf-48b5ca3ddba4/news-article-14.jpeg?fm=jpg&q=80&fit=max&crop=1920%2C1080%2C0%2C0&w=810)
India's inflation rate saw a slight decrease at the beginning of 2024, signaling a persistent challenge for monetary policymakers in the country. The consumer-price index rose by 5.10% year-on-year in January, dropping from December's 5.69% and reaching a three-month low, as stated by the Indian government on Monday. Although economists had anticipated a greater ease to 5.0%, as per FactSet consensus estimates.
The decline in inflation was mainly driven by a decrease in food prices, which rose by 7.6% compared to over 9% in December. Furthermore, fuel prices experienced deflation of 0.6% on a yearly basis.
Although the overall inflation rate is within the targeted range of 2%-6%, it remains above the "4% on a durable basis" aimed by the Indian central bank.
Last week, the Reserve Bank of India decided to maintain its policy rate at 6.50%, with Governor Shaktikanta Das acknowledging that inflation is generally on a downward trajectory. The bank predicts prices to increase by an average of 4.5% in the fiscal year starting in April.
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