Retail inflation came at 6.58 per cent in February, government data showed on Thursday, lower than the 6.80 per cent forecast in a Reuters poll of analysts. Data also showed that the country's industrial output rose 2 per cent in January from a year earlier. Analysts polled by Reuters had forecast a rise of 0.7 per cent.
Here's what experts said on the numbers:
SAKSHI GUPTA, SENIOR ECONOMIST, HDFC BANK, GURUGRAM
"The extent of the moderation in the February inflation print was a positive surprise. The fall was led by a sharper-than-expected drop in food inflation in the month. With the food price spike cooling off, inflation readings over the coming months are likely to move down within the RBI's target range in H1 2020.
"The decline is expected to be quicker than what we had earlier expected, aided by the sharp fall in oil prices. A 10 per cent drop in Brent crude leads to 20-30 bps fall in inflation. We expect the inflation print for March to be lower than our earlier estimate with the revision in petrol, diesel and LPG prices.
"Although the number of infected cases remain contained in India, lower domestic services demand along with moderation in manufacturing activity as global demand and supply chains get disrupted, could mean that GDP growth slows down further from 5 per cent.
"We expect the central bank to cut rates in April and again in June to support growth. Moreover, it is likely to take further measures to boost liquidity with the possibility of another LTRO or TLTRO."
UPASNA BHARDWAJ, SENIOR ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
"The moderation in inflation has expectedly been led largely by food inflation, while core inflation remains muted amid tepid demand. We expect the inflation trajectory to continue to be moderate, led by deflationary trends from falling crude oil prices, lower food prices and weak demand.
"With domestic and global growth expected to face downside risks from the spread of the COVID-19 and deflationary forces emerging, we see room for up to 50 bps of rate cut by the MPC, with any further easing contingent on the evolving growth environment."
RAHUL GUPTA, HEAD OF RESEARCH - CURRENCY, EMKAY GLOBAL FINANCIAL SERVICES, MUMBAI
"The CPI figure remained elevated above the MPC's target range on other key sectors such as gold prices. Meanwhile, India's Jan IIP has surged to 2 per cent from 0.3 per cent in December, highly due to an uptick in coal production, electricity and manufacturing PMI.
"Due to the coronavirus uncertainty, we expect the Reserve Bank of India (RBI) to take pre-emptive measures anytime soon or at April's MPC policy and cut the repo rate. If the virus spreads rapidly then we can expect a deeper cut of 50 bps by the RBI."
ANAGHA DEODHAR, ECONOMIST, ICICI SECURITIES, MUMBAI
"This inflation number is slightly lower than our expectation, mainly due to softer inflation in food and miscellaneous items. Food prices seem to have cooled faster than anticipated, leading to a much-needed drop in retail inflation.
"Apart from the "normalization" in food prices, coronavirus-related fears have also led to a sharp fall in some food items (such as poultry and eggs). Hence, we expect faster drop in food inflation going forward. Although, fuel inflation has inched up this month, we expect a steep fall going forward as global oil prices dive. Hence, headline inflation should ease in the coming months making room for the RBI to deliver a rate cut."
RAHUL BAJORIA, CHIEF INDIA ECONOMIST, BARCLAYS, MUMBAI
"CPI came in weaker than expected, largely due to the lower food prices. CPI is set to re-enter the RBI's target band in March, as lower energy prices, pullback in demand and global headwinds are mounting. The RBI is likely to throw caution in the wind and could even move inter-meeting as uncertainty is rising."
RUPA REGE NITSURE, GROUP CHIEF ECONOMIST, L&T FINANCIAL HOLDINGS, MUMBAI
"CPI has eased on the back of easing food inflation and core inflation. This means the impact of tariff adjustments in certain services has started tapering and food prices are getting normalised. The plunge in oil prices should pull down inflation further in the coming months.
"On the other hand, industrial production growth has returned to the positive zone due to an uptick in the output of primary goods and select consumer goods such as textiles, wood products, and leather products. As the RBI is providing support through unconventional measures and currency swaps, we do not see any need for a rate cut."
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)