Retail Inflation Drops to 7-Month Low of 3.61% in February 2025
India’s retail inflation fell to a seven-month low of 3.61% in February 2025, down from 4.26% in January, offering significant relief to consumers. The decline, driven largely by lower food prices, surpassed expectations from a poll of economists.
Official data released by the government on Tuesday highlighted a 65 basis-point drop in headline inflation from January to February 2025. This marks the lowest year-on-year inflation rate since July 2024, signaling a positive shift for the economy.
The government statement noted, “There is a decline of 65 basis points in headline inflation of February 2025 in comparison to January 2025.”
A key factor behind this dip was a significant reduction in food inflation. The All India Consumer Food Price Index (CFPI) recorded a year-on-year inflation rate of 3.75% in February 2025, a provisional figure.
Compared to January 2025, food inflation saw a sharp fall of 222 basis points. The data revealed that February 2025’s food inflation is the lowest since May 2023.
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The inflation figures also showed a disparity between rural and urban areas. Rural inflation stood at 4.06%, while urban areas recorded a lower rate of 3.20% in February 2025. This gap underscores varying economic pressures across different regions of the country.
The government emphasized the positive trend in its official release: “It is the lowest year-on-year inflation after July 2024.” The decline in food prices was flagged as a major contributor to easing inflationary pressures.
No additional comments from economists or Reserve Bank of India officials were available at the time of reporting.
With retail inflation now at its lowest in seven months, attention turns to how this will impact monetary policy decisions. The Reserve Bank of India may review these figures in its upcoming meetings to assess interest rate strategies.
Consumers can expect continued relief if food prices remain stable, though experts will monitor global and domestic factors for any shifts.
