February CPI Data: India's Retail Inflation Eases To Seven-Month Low At 3.61% As Food Inflation Moderates
Inflation also fell below the central bank's target of 4% for the first time in six months.
India's retail inflation moderated to a seven-month low in February, led by falling vegetable prices.
India's consumer price index-based inflation moderated to 3.61% in February from 4.26% in January, according to data from the Ministry of Statistics and Program Implementation on Wednesday. Food and beverage inflation eased to 3.84% in February from 5.68% in January. The decline was led by vegetable inflation, which contracted by -1.07% in February, after rising by 11.35% in the previous month.
A Bloomberg poll of economists had pegged the median inflation estimate at 3.98% for February.
Core inflation, which excludes the volatile food and fuel components, rose to 4.05% in February from 3.76% in January, according to Bloomberg.
Inflation also fell below the central bank's target of 4% for the first time in six months. With inflation coming down to less than 4% and likely to remain low in March too, there is a good chance of a further repo rate cut in April, given that the RBI has been doing everything to provide an easy flow of liquidity, Madan Sabnavis, chief economist at Bank of Baroda, said, adding that another 25 basis points cut can be expected in the April policy.
However, the sequential uptick in vegetable inflation in March 2025 is likely to prevent a further softening in the food and beverages inflation print in the month, after the substantial cooling seen over the past four months, Aditi Nayar, chief economist at ICRA, said. This would push up the CPI inflation print mildly to about 3.9-4.0% in the next month, according to her estimates. Overall, the CPI inflation is now expected to average at 3.9% in the fourth quarter of the ongoing fiscal, well below the MPC's projection of 4.4% for that quarter, Nayar said.
Key Internals
Cereal prices rose by 5.47% after rising by 6.2% in January.
Inflation for meat and fish was 2.23%, compared to a rise of 5.25% in the previous month.
Inflation in eggs was at -2.3% after rising by 1.27% last month.
The inflation rate for milk and milk products was 2.84% as compared to 2.85% in the previous month.
Inflation in pulses stood at -0.39% after rising by 2.59% last month.
Clothing and footwear inflation rose to 2.86%
Housing prices went up by 2.91%, compared to 2.82% last month.
