Some consumer prices that skyrocketed in January probably returned to Earth in February, indicating fears of runaway USA inflation that jarred financial markets were overblown.
India's consumer price index (CPI) or retail inflation stood at 4.44% in the month of February 2018, lower from 5.05% in January 2018, slightly in line with analysts expectations, however the numbers were higher compared to 3.65 in the corresponding month of the previous year.
RBI had left policy rates unchanged fearing a rise in inflation and had projected Q4FY2018 inflation at 5.1%, including the impact of HRA, considering the rise in fuel prices in January 2018, and less-than-usual moderation in seasonal food prices.
The rate of increase in price rise slowed for the second consecutive month after hitting a fresh high of 5.2 percent growth in December and 5.07 percent in January due to unusual pick-up in food prices and rise in domestic petrol and diesel prices.
The manufacturing sector grew at 8.7%, followed by electricity at 7.6%.
The mining sector, however, registered negligible growth of 0.1 per cent, as compared to 8.6 per cent rise in January a year ago.
India's February core annual consumer price inflation was in the range of between 5.04 and 5.16 percent, according to estimates of two analysts.
Consumer durables recorded a growth rate of 8 per cent as against a decline of 2 per cent in the same month a year ago.
"Hence, it can be expected that RBI may not dilute its position on expected inflationary risks and is likely to maintain status quo during the April monetary policy".
On a monthly basis, industrial production dropped a seasonally and working-day-adjusted 0.4 percent in January.
Inflation softened last month mainly on account of cheaper food prices and lower cost for fuel.
During January, 16 out of 23 industry groups in the manufacturing sector showed positive growth.
Teresa John analysts at Nirmal Bang expected, CPI inflation for February 2018 to come in at 4.9%, down from 5.1% in the previous month.