A big relief has been reported on the CPI Inflation in the country. Retail inflation has come down to 3.61% in February 2025, the lowest level of the last 7 months.

According to data released by the National Statistics Office (NSO),

• This rate was 4.26% in January 2025, while
• It was 5.09% in February 2024.

The main reason for this decline in inflation is said to be a decrease in prices of vegetables and protein -rich products (meat, fish, eggs, pulses, milk etc.).

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Expectation of repo rate reduction increased

This decline in inflation rate may open the way for the Reserve Bank of India (RBI) to cut the repo rate in the monetary policy review meeting to be held in April 2025.

Let us know that in February 2025, RBI had cut the policy interest rate by 0.25%.

The government has targeted RBI to keep retail inflation within 4% (± 2%). In such a situation, if inflation remains under control, RBI can cut interest rates for the second consecutive time in the next meeting.

Big fall in food inflation

According to NSO data,

• The food inflation rate was 3.75% in February 2025, the lowest since May 2023.
• Food inflation declined by 2.22% compared to January 2025.

The main reasons for decreasing inflation:

Reduction in vegetable prices
Fall in meat, fish and egg prices
Prices of pulses and milk products also decreased

Bounce in Industrial Production (IIP)

Along with the decrease in inflation, there was an improvement in the country’s industrial production (IIP).

• Industrial production increased by 5% in January 2025.
• It was 4.2% in January 2024, while
• The 3.2% estimate of December 2024 was revised to 3.5%.

Experts believe that this bounce in industrial production was seen due to the good performance of the manufacturing sector.