New Delhi (thestates.news)| Driven by lower food prices, India’s retail inflation fell to a seven-month low of 3.61% in February this year from 4.26% in the previous month. The decline in retail inflation has raised hopes of a further cut in repo rate by the Reserve Bank of India (RBI) in the upcoming monetary policy committee (MPC) meeting.
“The February 2025 CPI inflation print falling well below 4% has cemented the expectation of a back-to-back 25 bps rate cut in the April 2025 MPC meeting. This may be followed by another 25 bps repo rate cut either in the June 2025 or the August 2025 meetings, dependent in large part on the next GDP growth print for Q4 FY2025,” said Aditi Nayar, chief economist at research and rating firm ICRA.
As per data released by Ministry of Statistics & Programme Implementation (MoSPI) on Wednesday, food inflation in the month of February this year stood at 3.75% as compared to 5.97% in the previous month. “A sharp decline of 222 basis point is observed in food inflation in February, 2025 in comparison to January, 2025. The food inflation in February, 2025 is the lowest after May, 2023,” an official press release said.
Both urban and rural inflation declined significantly in the month of February. With retail inflation staying below its comfort level, the MPC in February this year decided to cut the repo rate by 0.25% to 6.25%. The CPI-based inflation is a primary factor for the Reserve Bank of India for formulating monetary policies to target inflation.
The RBI is tasked to maintain inflation at 4% with a margin of 2% on either side. The significant decline in headline inflation and food inflation during the month of February, 2025 was mainly on account of decline in inflation of vegetables, eggs, meat & fish, pulses & products and milk & products.
The key items having lowest year on year inflation in February, 2025 are ginger (-35.81%), jeera (-28.77%), tomato (-28.51%), cauliflower (-21.19%) and garlic (-20.32%).
The top five items showing highest year on year Inflation at All India level in February 2025 are coconut oil (54.48%), coconut (41.61%), gold (35.56%), silver (30.89%) and onion (30.42%).
Top five major states with high year-on-year inflation for the month of February, 2025 were Kerala, Chhattisgarh, Karnataka, Bihar and Jammu & Kashmir (J&K). (UNI)
Retail inflation dips to 7-month low of 3.61 pc in Feb on lower food prices
