Inflation Rates Across States: Kerala Tops the Chart

In a recent data release, Kerala has been identified as the state with the highest retail inflation rate in February, reaching up to 7.3%. This is significantly higher compared to other states, with Chhattisgarh following at 4.9%, and Karnataka and Bihar both at 4.5%. On the other end of the spectrum, Telangana reported the lowest inflation rate at 1.3%, with Delhi and Andhra Pradesh not far behind at 1.5% and 2.4% respectively.

Out of the 22 states analyzed, 13 have managed to keep their inflation rates below the Reserve Bank of India's target of 4%. This data, released by the National Statistical Office (NSO), indicates a cooling down of retail inflation to a 7-month low of 3.6% in February from 4.3% in January, primarily due to a sharp decline in food prices.

Understanding the Inflation Dynamics

Soumya Kanti Ghosh, the group chief economic adviser at SBI, highlighted that inflation in larger states continues to outpace the all-India inflation rate for the same month. He pointed out that rural inflation is outpacing urban inflation, largely due to higher food prices. The weight of food items in the rural basket (54.2%) is significantly higher than in the urban basket (36.3%), contributing to this disparity.

This analysis sheds light on the persistent price pressures in some of the larger states and the varying inflation rates across the country. As the RBI contemplates another cut in interest rates in April, these figures play a crucial role in shaping monetary policy decisions.