The prices of milder vegetables, in particular that of the basic food in the kitchen, helped to mitigate retail inflation at a lower than 4.31% in January 2025 and the prices should fall more in the to come. While the January number supported the decision of the Monetary Policy Committee to reduce rates, analysts, however, cautious that to move forward the depreciating rupe could also have an impact on monetary policy.
According to official data published Wednesday, inflation based on the consumer price index took place at 4.31% in January, against 5.22% in December. It was 5.1% in January 2024. Inflation of consumer food prices also cooled at 6.02% in January of this year, compared to 8.39% in December 2024.
Inflation in the food and drinking basket was also spent at 5.68% in January, compared to 7.69% the previous month. Vegetable inflation remained high, but was Delia being 11.35% in January, compared to 26.56% in December.
The prices considered to be moderate in February, retail inflation should go further. ICRA set the inflation of the IPC in February at 4%. India’s notes and research also predict that IPC inflation in February and March 2025 is in the range of 3.9% to 4%.
“According to the first data in February 2025 (until February 10, 2025), the average retail prices of 14 of the 22 essential products (less wheat, sugar and the most edible oils) are softened on a basis sequential of the month. The considerable moderation of vegetable prices should increase good for inflation of annual shift food and drinks for the month, which is expected to relax at a six -month of approximately 5.2% in February 2025 ” , said Aditi Nayar, chief economist and head of research and awareness, ICRA.
Suman Chowdhury, Executive Director and Chief Economist, Acuity Ratings & Research, noted that the high correction of the price of the tomato, onion and the potato – the key components of the CPIF – contributed to this trajectory to this trajectory the drop in food inflation. “In addition, a drop in inflation of impulses, supported by imports without a price and strong harvest expectations, has also helped to mitigate food prices,” he said. For the future, Rabi Sowing was in accordance with the expectations and prices of vegetables continued to lower more in February 2025, which should help maintain inflation of pregnancy in check for the next two months, it was He declared.
Analysts, however, warned that edible oil prices, with retail inflation in basic matters, going at 15.64% in January, could make a challenge in the coming months as well as imported higher inflation Due to the decrease in the rupee.
Central inflation experienced a marginal increase to 3.7% in January, against 3.6% the previous month.
The RBI has set retail inflation in the fourth quarter of the financial year at 4.4% and expects it to relax 4.5% in the first quarter of the financial year 26. The next meeting of the meeting MPC of the RBI will be held in April.
Paras Jasrai, principal analyst, India Ratings noted that the relaxation of future policy would depend on the data. “The action of monetary policy in April 2025 monetary policy depends on the movement of the currencies and the liquidity of the system,” he said.
Upasna Bhardwaj, chief economist, Kotak Mahindra Bank, expects the inflation trajectory to remain mild in the coming months to provide space for 25 other points of basis of rate reduced by the MPC. “However, the rhythm of the depreciation of the INR will have to be closely monitored for spills on domestic inflation,” she noted.
