The Crossbill News Desk
Retail inflation in India is expected to have eased further in February 2025, dropping below the 4% mark, largely due to a significant fall in vegetable prices, according to a report by the Union Bank of India.
The report also suggests that food inflation, a key driver of overall inflation, likely fell below 5% for the first time since June 2023, The Economic Times reported.
The report estimates that Consumer Price Index (CPI) inflation declined to 3.94% in February, compared to 4.31% in January.
“India CPI likely slowed down further to 3.94 per cent in Feb'25 as against 4.31 per cent in January'25 on account of further easing in vegetable prices, especially OPT (onion, potato & tomato),” the report noted, reported ET.
Food inflation, which constitutes a major portion of retail inflation, is estimated to have dropped to 4.66% in February, marking a substantial decline. The month-on-month food inflation remained negative for the fourth consecutive month, in line with seasonal trends where winter typically brings lower vegetable prices.
The sharp decline in vegetable prices is reflected in the vegetable CPI, which fell from 11.35% in January to 3.89% in February. On-the-ground prices of vegetables and pulses continued to ease during the month, further contributing to the downward trend in food inflation. The report attributed this decline to robust kharif production and seasonal corrections in winter.
However, the prices of edible oils and sugar showed an upward trend, exerting some inflationary pressure. Meanwhile, core CPI, which excludes food and fuel, edged up to 3.87% in February from 3.66% in January, primarily due to rising gold prices. Fuel CPI remained in a deflationary zone, helping offset some of the inflationary effects from other sectors.
The latest estimates indicate that India’s inflation trajectory is on a downward path, offering relief to both consumers and policymakers. However, experts caution that fluctuations in global commodity prices and domestic food supply dynamics could continue to influence inflation trends in the coming months.
The report also suggests that food inflation, a key driver of overall inflation, likely fell below 5% for the first time since June 2023, The Economic Times reported.
The report estimates that Consumer Price Index (CPI) inflation declined to 3.94% in February, compared to 4.31% in January.
“India CPI likely slowed down further to 3.94 per cent in Feb'25 as against 4.31 per cent in January'25 on account of further easing in vegetable prices, especially OPT (onion, potato & tomato),” the report noted, reported ET.
Food inflation, which constitutes a major portion of retail inflation, is estimated to have dropped to 4.66% in February, marking a substantial decline. The month-on-month food inflation remained negative for the fourth consecutive month, in line with seasonal trends where winter typically brings lower vegetable prices.
The sharp decline in vegetable prices is reflected in the vegetable CPI, which fell from 11.35% in January to 3.89% in February. On-the-ground prices of vegetables and pulses continued to ease during the month, further contributing to the downward trend in food inflation. The report attributed this decline to robust kharif production and seasonal corrections in winter.
However, the prices of edible oils and sugar showed an upward trend, exerting some inflationary pressure. Meanwhile, core CPI, which excludes food and fuel, edged up to 3.87% in February from 3.66% in January, primarily due to rising gold prices. Fuel CPI remained in a deflationary zone, helping offset some of the inflationary effects from other sectors.
The latest estimates indicate that India’s inflation trajectory is on a downward path, offering relief to both consumers and policymakers. However, experts caution that fluctuations in global commodity prices and domestic food supply dynamics could continue to influence inflation trends in the coming months.
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