India's February retail inflation rises at faster than expected pace

NEW DELHI (Reuters) - India's annual retail inflation in February rose at a faster than expected pace due to higher food prices, government data showed on Tuesday.

Annual retail inflation eased slightly to 5.09% in February from 5.10% in January, but was higher than 5.02% forecast by a Reuters poll of 42 economists.

Food inflation, which accounts for nearly half of the overall consumer price basket, rose 8.66% in February, compared with a 8.30% rise in January.

Despite retail inflation being within the mandated band of 2%-6%, uncertainties in food prices have worried policymakers.

Last month, the Reserve Bank of India (RBI) left its rates unchanged and signalled it would not lower interest rates until it achieves inflation of 4% on a durable basis.

Core inflation, which strips out volatile food and energy prices, is estimated at 3.3%-3.37% in February, compared with 3.6% in January, according to two economists.

(This story has been corrected to fix the core inflation estimate by economists to 3.3%-3.37%, not 3.03%-3.37%, in paragraph 6)

(Reporting by Aftab Ahmed; Editing by YP Rajesh)