The food inflation in India likely fell below 5 per cent for the first time since June 2023, says a report by Union Bank of India.
The report additionally famous that the India’s total retail inflation is anticipated to have slowed down additional in February 2025, falling below the 4 per cent mark, primarily resulting from a decline in vegetable costs.
It stated “Food inflation has most likely come below the 5 per cent ranges for the first time after June’23”.
The report estimated that the Shopper Value Index (CPI) inflation dropped to three.94 per cent in February, in comparison with 4.31 per cent in January 2025.
It stated “India CPI likely slowed down additional to three.94 per cent in Feb’25 as towards 4.31 per cent in January’25 on account of additional easing in vegetable costs, particularly OPT (onion, potato & tomato)”.
Food inflation, a significant part of retail inflation, is estimated to have fallen additional to 4.66 per cent in February 2025, marking a major decline. That is the first time since June 2023 that food inflation has likely dropped below the 5 per cent degree.
The month-on-month (m/m) food inflation remained in adverse territory for the fourth consecutive month, aligning with the winter season when vegetable costs usually decline.
The impression of this downward development is clear in the greens CPI, which fell sharply from 11.35 per cent in January 2025 to three.89 per cent in February 2025. On-the-ground (OTG) costs of greens and pulses continued to ease throughout the month, contributing to the total decline in food inflation.
The report highlighted that sturdy kharif manufacturing and seasonal winter corrections in vegetable costs have performed a vital position in reducing food inflation.
Nevertheless, costs of edible oils and sugar noticed an upward development throughout the similar interval.
On the different hand, core CPI, which excludes food and gas, inched as much as 3.87 per cent in February 2025 from 3.66 per cent in January 2025, primarily resulting from a rally in gold costs. In the meantime, gas CPI remained in a deflationary zone, serving to to offset some of the inflationary pressures in different classes.
The most recent estimates point out that India’s inflation trajectory is on a downward development, bringing aid to customers and policymakers. Nevertheless, fluctuations in international commodity costs and home food provide dynamics will proceed to affect future inflation tendencies.
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