Retail inflation expected to be below 4% after five months, food inflation expected to fall in February

New Delhi| Retail inflation, which continues to remain above the RBI ambit, may fall below four percent for the first time in five months. According to the Center for Monitoring Indian Economy (CMIE), the Consumer Price Index (CPI) is likely to fall to 3.81 percent in February 2025. It stood at 4.31 in January and 3.65 per cent in August last year.

According to CMIE, the average retail inflation so far in the current financial year has been 4.87 percent. This time the reason for the fall in food prices is the effective reduction in prices. Winter improvement in vegetable prices and continued moderation in pulses prices have helped curb inflation. But, due to strengthening of gold prices, the main inflation is expected to increase. Food inflation is likely to decline to 4.3 percent in February 2025 from six percent in January. This would be the lowest since May, 2023. Vegetable prices, which have raised inflation concerns, have fallen sharply. This has brought great relief to food inflation. It is estimated that the inflation rate of vegetables has declined to 1.4 percent in February, which is much lower than 11.4 percent in January. Between April, 2024 and January, 2025, the average inflation rate for vegetables was as high as 24 percent.

Vegetables 9% cheaper on a monthly basis
The data said vegetable prices may decline by nine percent on a monthly basis, indicating a decline in prices for the fourth consecutive month. The average price of tomatoes in February was Rs 23 per kg. Its price is likely to fall by more than 30 percent. Onion and potato prices were Rs 36 per kg and Rs 26 per kg respectively in February. However, these prices are still above the level of a year ago.

Prices of garlic and ginger also fell
The prices of other vegetables like garlic, ginger, cabbage, cauliflower, brinjal and okra have also come down. Pulses also helped reduce food inflation. Pigeons saw a monthly decline of 7.2% in February. Inflation in cereals and products declined to 5.9% in February. In January, 6.2% was. Wheat prices continued to rise, although it remained weak.

Spices, sugar and oil still at high prices
Prices of fruits, spices, sugar, oils and fats and milk and other products are likely to increase. Fruits, oils and fats can be expensive in double digits. Inflation in fruit is forecast to rise to 14.5 per cent in February.

Bank of Baroda estimates 4.1 per cent
Bank of Baroda estimates that retail inflation could stand at 4.1 per cent in February. However, it has said that rising prices of edible oils globally, tariff policies and unusual heat may face challenges in reducing inflation.