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Informist, Wednesday, Mar. 12, 2025

 

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--India Feb CPI inflation 3.61% vs 4.26% Jan
--Informist poll estimated India Feb CPI inflation at 3.9% 
--India Feb CPI food inflation 3.75% vs 5.97% Jan 
--India Feb CPI rural inflation 3.79% vs 4.59% Jan 
--India Feb CPI urban inflation 3.32% vs 3.87% Jan 
--India Feb CPI general index down 0.5% on month 
--India Feb CPI food price index down 2.0% on month 
--India Feb CPI cereals and products index up 0.5% on month 
--India Feb CPI vegetable index down 11.2% on month 
--India Feb CPI pulses and products index down 3.6% on month 
--India Feb CPI oils and fats index up 0.1% on month
--India Feb CPI food, beverage index down 1.6% on month 
--India Feb CPI housing index up 0.6% on month 
--India Feb CPI clothing, footwear index up 0.2% on month 
--India Feb CPI fuel and light index up 0.1% on month 
--India Feb CPI miscellaneous index up 0.6% on month
--India Feb CPI inflation of 3.61% lowest in 7 months 
--India Feb CPI core inflation 4.0% vs 3.7% Jan 
--India Feb CPI core inflation of 4.0% highest in 15 months

 

NEW DELHI – India's headline CPI inflation fell below the Reserve Bank of India's medium-term target of 4% for the first time in six months as vegetable prices continued to decline during the month even as core inflation rose to a 15-month high. According to data released by the statistics ministry on Wednesday, CPI inflation moderated to a seven-month low of 3.61% in February from January's revised lower print of 4.26%. CPI Inflation was 5.09% in February 2024.

 

At 3.61%, CPI inflation in February was well below the consensus expectation. According to an Informist poll, the headline inflation was seen at 3.9% in February.

 

Vegetable inflation fell to (-)1.07% in February. This is the first time vegetable inflation is in the negative territory since June 2023. On a sequential basis, vegetable prices fell 11.2% in February from the previous month. The fall in vegetable prices also pulled down food inflation to a 21-month low of 3.75% last month from 5.97% in January. The food price index fell 2.0% on month in February, which pulled down the general index of the CPI 0.5% from January.

 

Apart from vegetables, prices of pulses also declined in February, falling 3.6% on month. Pulses inflation was also in the negative territory in February. 

 

While food inflation declined substantially last month, core inflation surged. Core inflation--which excludes food and fuel items, prices of which can be volatile--rose to a 15-month high of 4.0% in February from 3.7% in January. This is the first time since June 2023 that core inflation is higher than headline CPI inflation. 

 

All four sub-components of core inflation rose on month in February. Both housing and miscellaneious indices rose 0.6% on month in February, pusing core inflation higher. "Here (miscellaneous segment), the personal care products segment has witnessed double digit inflation with higher raw material prices adding to the price increase," Bank of Baroda Chief Economist Madan Sabnavis said.

 

The lower-than-expected CPI inflation print would provide comfort to policymakers, particularly the RBI's Monetary Policy Committe, which lowered the repo rate for the first time in nearly five years in February. The MPC has lowered the repo rate by 25 basis points to 6.25% last month, and is expected to cut the rate further in April. 

 

"With inflation coming down to less than 4% and likely to remain low in March too, there is a good chance of a further repo rate cut in April given that RBI has been doing everything to provide easy flow of liquidity," Sabnavis said. "Another 25 bps cut can be expected in April policy." 

 

With February's print, CPI inflation is likely to be much lower than the RBI's forecast of 4.4% for Jan-Mar. Economists also expect inflation to remain closer to RBI's 4% inflation target in the near-term, barring any food price shocks.

 

The following table details sequential and annual increase in the main components of the CPI (Combined):

 

	Weight	Index for February	Month-on-month change (in %)	Year-on-year change (in %)
				February	January
Cereals and products	9.67	200.0	0.5	6.10%	6.24%
Meat and fish	3.61	222.6	(-)0.8	2.11%	5.25%
Egg	0.43	196.8	(-)5.3	(-)3.01%	1.27%
Milk and products	6.61	187.9	0.0	2.68%	2.85%
Oils and fats	3.56	184.2	0.1	16.36%	15.64%
Vegetables	6.04	193.4	(-)11.2	(-)1.07%	11.35%
Pulses and products	2.38	201.9	(-)3.6	(-)0.35%	2.55%
Sugar and confectionery	1.36	132.2	1.3	2.16%	0.31%
Spices	2.5	223.9	(-)0.8	(-)5.85%	(-)6.85%
Food and beverages	45.86	197.6	(-)1.6	3.84%	5.68%
Pan, tobacco and intoxicants	2.38	210.1	0.3	2.39%	2.30%
Clothing and footwear	6.53	195.4	0.2	2.68%	2.68%
Housing	10.07	183.7	0.6	2.91%	2.82%
Fuel and light	6.84	178.3	0.1	(-)1.33%	(-)1.49%
Miscellaneous	28.32	188.4	0.6	4.78%	4.35%
General Index	100	192.5	(-)0.5	3.61%	4.26%
Consumer Food Price Index	39.06	196.6	(-)2.0	3.75%	5.97%

 

End

 

Reported by Shubham Rana

Edited by Akul Nishant Akhoury

 

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