Food and beverages inflation in the financial year 2025-26 is expected to moderate to 4.9 percent from 7 percent estimated for FY25, ratings agency ICRA said on April 1.
Cooling food inflation in FY26 may provide relief to low and middle-income households, which augurs well for discretionary consumption.
Food inflation has been a pain point for the Consumer Price Index (CPI) inflation, keeping it on the higher side for most of the months in 2024. In the last few months, food inflation has seen a downward trend.
In February, food inflation moderated below 4 percent for the first time in nearly two years, which led to the CPI inflation print easing to 3.61 percent.
The drop in February was only the third time in FY25 that inflation dipped below RBI’s medium term target of 4 percent.
Food inflation eased to 3.75 percent, the lowest in 21 months, as vegetable prices declined 1.1 percent from the previous year, compared with an 11.4 percent rise in January.
Food prices grew 6 percent over the previous year. Pulses, which have been on a downward trajectory, also witnessed deflation in February compared with 2.6 percent rise in prices.
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