Kerala has once again recorded the highest retail inflation in India for the second consecutive month, with its inflation rate nearly double the national average. According to the latest data from the Union Ministry of Statistics, Kerala’s inflation surged to 7.31% in February, up from 6.76% in January, far exceeding the Reserve Bank of India’s (RBI) target range of 2-6%.
In contrast, India’s overall retail inflation, measured by the Consumer Price Index (CPI), dropped to 3.61% in February, marking a seven-month low. Rural inflation fell to 3.79%, while urban inflation declined to 3.32%. Food inflation, a key driver, also saw a significant drop, falling to 3.75%, the lowest since May 2023.
Kerala’s inflation woes are primarily driven by rising rural prices, which soared to 8.01% in February, the highest in the country. Urban inflation in the state also increased to 5.94%. Key commodities like coconut oil (54.58%), coconut (41.61%), and gold (35.56%) saw substantial price hikes, while items like ginger (-35.81%) and tomatoes (-28.51%) experienced significant price drops.
With national inflation below the RBI’s 4% target, speculation is growing that the central bank may further cut interest rates. The RBI had already reduced the repo rate by 0.25% in February, and another cut could be on the horizon in its upcoming meeting. Kerala’s persistent inflation highlights the state’s economic challenges, requiring targeted interventions to stabilize prices.
