- Key Points
- India’s inflation rate in February fell to a lower-than-expected 3.61% in February as vegetable prices cooled, the country’s Ministry of Statistics and Programme Implementation said Wednesday.
The Ministry of Statistics and Program of India said on Wednesday that vegetable prices decreased, resulting in a minimum of 3.61 percent of an outstanding inflation rate from February. Reuters polled economists and found that they had estimated 3.98% for the period. This is the first time inflation has fallen below the RBI’s 4% target since summer, and it is the lowest monthly reading since July 2024. A major component of the country’s CPI, food inflation, reached 3.75%, and vegetable prices fell 1.07% annually, compared to 11.35% in January.
Prices of pulses also fell 0.35 percent in February compared to an increase of 2.59 percent in January. In contrast, the prices of food grains and products decreased to 6.1% in February, decreasing from 6.24% in January. Analysts of the Bank of America noted on 5 March that the high supply caused a sharp fall in vegetable prices, especially for potatoes and tomatoes. He continued, “We hope that the improvement in vegetable prices will begin to reverse, possibly in early March, with the risk of disintegration of heat and weather-related crop.” After implementing its first deduction in about five years early last month,
India’s fifth largest economy may increase the case for a decline in inflation and slow growth and interest rate cuts. India’s GDP increased by 6.2% in the fourth quarter, which was less than expected, and at that time, the repo rate rose from 25 basis points to 6.25%. In general, the Indian economy only increased by 6.5 percent in the financial year ending March 2025, a significant recession from last year’s 9.2 percent increase. However, the RBI Monetary Policy Committee has previously expressed concern about the global market Hedwin