2 good news for the country before Holi, inflation lowest in 7 months... IIP jump

Big, good news has come out regarding India's retail inflation rate. During the month of February, the retail inflation rate has reached a 7-month low. This is much lower than the RBI's range. The retail inflation rate in February 2025 was 3.61%, which is a big decline. Whereas during January the retail inflation rate was 4.26%.

This is much lower than the RBI's range

The data shared by the government is better than the data given by The Economist. The Economist had estimated more, while the government data has shown less retail inflation. According to government data, there is a decline of 65 basis points in retail inflation in February 2025 as compared to January 2025.

This is the lowest year-on-year inflation since July 2024. That is, the inflation rate has reached a 7-month low.

These things became cheaper

Tomatoes, onions, potatoes and green vegetables have seen a decline in prices, which has led to a reduction in the inflation rate. At the same time, a decline has also been seen in consumer products and food items.

The NSO said that the significant decline in inflation and food inflation during February was mainly due to a decline in inflation of vegetables, eggs, meat and fish, pulses and products, and milk and products. The main reason for this is the reduction in the price rise of vegetables and protein-rich items.

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RBI can cut repo rate

The Reserve Bank of India had cut the repo rate in the last monetary policy, due to which loan takers got a big relief. At the same time, now with a big reduction in inflation, it can be believed that the Reserve Bank of India can once again reduce the interest rate in its next monetary policy.

 Another relief news

Meanwhile, due to the good performance of the manufacturing sectors, the country's Industry Production (IIP) grew by 5 percent in January this year. Industrial production, measured in terms of the Industry Production Index, grew by 4.2 percent in January 2024.

According to official data released on Wednesday, the government has revised the provisional estimate of 3.2 percent growth in December 2024, which has now been revised to 3.5 percent.

Why did inflation decrease so much?

One of the major reasons for the decline was the fall in food prices. Consumer Food Price Index (CFPI) inflation stood at 3.75% in February, which is 222 basis points lower than January. This is the lowest food inflation since May 2023.

The data showed that inflation in rural areas was higher than in urban areas. The overall inflation rate in rural areas was 3.79% in February, which was 4.59% in January.

Food inflation in rural India fell from 6.31% in January to 4.06% in February. Inflation in urban areas fell from 3.87% in January to 3.32% in February. While food inflation fell from 5.53% to 3.20%.

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Summary

It is worth noting that housing inflation was 2.91% in February, slightly higher than 2.82% in January. Fuel and energy inflation remained negative at -1.33% compared to -1.49% in January. Inflation in education remained stable at 3.83%, while inflation in health increased from 3.97% to 4.12%.

 Inflation in transport and communication sectors stood at 2.87%, which was 2.76% in January.