India's Inflation Falls to 3.61 per cent in February 2025, IIP Grows 5 per cent
India's retail inflation fell to 3.61 per cent in February 2025, driven by lower food prices, while industrial production grew 5 per cent in January, signaling manufacturing sector recovery.
India's retail inflation fell to a seven-month low of 3.61 per cent in February 2025, marking the first instance in six months where inflation dropped below 4 per cent. This decline was primarily driven by a significant drop in vegetable prices, as per government data released on Wednesday. The inflation rate for January was revised downward to 4.26 per cent from the earlier estimate of 4.31 per cent. The latest figure is the lowest recorded since July 2024.
Food inflation also eased to 3.75 per cent in February, the lowest level since May 2023, after standing at 5.97 per cent in January. Vegetable prices saw a 1.07 per cent decline on a year-on-year basis, in contrast to the 11.35 per cent rise observed in the previous month. Cereal prices increased by 6.1 per cent, slightly lower than the 6.24 per cent rise recorded in January, while pulses experienced a 0.35 per cent drop, reversing the 2.59 per cent increase seen earlier.
According to data from the National Statistics Office (NSO), the decline in overall inflation was mainly due to lower price increases in vegetables, dairy products, eggs, meat, and pulses. The Reserve Bank of India (RBI), which targets retail inflation at 4 per cent within a 2 per cent margin, responded to easing inflationary pressures by reducing the repo rate by 25 basis points last month.
Meanwhile, industrial production in India grew by 5 per cent in January 2025, signaling a recovery in the manufacturing sector. The government also revised December 2024’s industrial output growth to 3.5 per cent from the initially reported 3.2 per cent. Factory output, measured by the Index of Industrial Production (IIP), maintained steady growth at 5 per cent in both January 2025 and November 2024.
Disclaimer: The article is for informational purposes only and not investment advice.