Food inflation down to 6.02%

RETAIL INFLATION, based on the consumer price index (CPI), fell to a five-month low of 4.31% in January from 5.22% in December, mainly due to a decline in prices of key food items such as vegetables, official data released on Wednesday showed.

- SANDIP DAS

The inflation of vegetables dropped sharply from 26.56% in December to 11.35% in January, primarily due to cooling tomato prices. Tomato inflation in January crashed to (-)7% from 31.44% the previous month, as the commodity's supply improved after a gap of four months.

Last week, the Reserve Bank of India (RBI) cut the policy repo rate by 25 basis points to 6.25% after a gap of nearly five years. And experts say that another 25 bps cut seems feasible in April in the backdrop of moderating price pressures.

As such, the monetary policy action in April will depend on currency movement and liquidity in the system. Future policy easing would be data dependent, say experts. The decline in vegetables' inflation is expected to continue in the next couple of months leading to inflation in February and March 2025 to be in the 3.9-4% range, India Ratings and Research (Ind-Ra) said in a note.