Context:
India’s retail inflation eased to a seven-month low of 3.61 per cent in February 2025, down from 4.31 per cent in January, as food price pressures softened, according to government data released on Wednesday. This brings inflation below the Reserve Bank of India’s (RBI) medium-term target of 4 per cent for the first time since August 2024.
Key Highlights:
- Retail Inflation Falls
- The number came down to a 3.61% in February, which is a 7 month low, primarily attributed to a fall in food prices.
- Food Inflation Cools
- Slumping from 6% in January to 3.75%, with price drops seen in vegetables ( 1.07%), pulses ( 0.35%), and eggs ( 3.01%).
- Industrial Growth Soars
- 5% grew IIP in January, an eight month high, and this was driven by 5.5% growth in manufacturing.
- Inflation in Rural vs. Urban
- Rural inflation: 3.79% (down from an earlier 4.59%)
- Urban inflation: 3.32% (down from an earlier 3.87%)
- Graves Concerns
- The price surges are, however, sharp as building up on edible oil (+16.36%) and fruits (+14.82%), in part due to currency depreciation.
- Policy Effect
- It strengthened the repo rate cut anticipation in the forthcoming April 7 MPC meeting, with inflation below the RBI target.
Source: BS
