India’s Food Inflation Expected to Drop Below 5%

Fast Summary

• India’s food inflation likely dropped below 5% in February 2025, a first since June 2023.
• Overall retail inflation is estimated to have slowed to 3.94%.
• Decrease primarily due to falling vegetable prices,especially onions,potatoes,and tomatoes.
• Month-on-month food inflation remained negative for the fourth consecutive month due to winter season price declines.
• Kharif production and seasonal adjustments contributed considerably to reduced food inflation.
• Edible oils and sugar prices saw an increase during the same period.
• Core CPI (excluding food and fuel) rose slightly to 3.87%, influenced by rising gold prices; fuel CPI remained deflationary.

Indian Opinion Analysis

the reported drop in food inflation below 5% is highly likely beneficial for consumers,easing household spending pressures. The decrease is attributed largely to seasonal factors like robust kharif output and typical winter reductions in vegetable costs.Though, sustained increases in other commodities like edible oils may offset some of these benefits. Policymakers might view this trend positively as it aligns with broader monetary stability goals by maintaining overall retail inflation below the target level of around 4%. yet ongoing monitoring will be essential as global commodity fluctuations could impact future trends.Read more

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