Food inflation likely to soften in Q4FY25, says RBI MPC member Ram Singh

Food inflation has been a pain point for the overall inflation, due to which it has remained on the higher side.

The Reserve Bank of India's (RBI) monetary policy committee (MPC) external member Ram Singh in the February minutes said that food inflation is likely to soften in the fourth quarter of the current financial year.

He also added that energy prices are also expected to be stable in the near future.

The CPI headline inflation figures will appear even more benign if the shares of food and beverages in the CPI inflation are reduced to their levels observed in the Household Consumption and Expenditure Surveys (HCES) data of the recent vintages, he added

"As such, the headline Indian inflation rate is actually lower than the global average," said Singh.

Food inflation has been a pain point for the inflation, due to which ut has remained on the higher side. However, in the last few months, food inflation has seen a downward trajectory.

India's inflation dipped to 4.31 percent for the first time in five months in January compared with 5.22 percent in the previous month, as food inflation eased further in the month, according to data released by the government on February 12.

Food inflation declined to 6 percent in January, dipping below the 8 percent mark for the first time in four months, as cereals, vegetables and pulses continued their downward march.

Low core inflation strengthens the case for a rate cut, especially when food price inflation is expected to moderate further. To the extent that inflation risk arises from food prices, it is expected to have a limited impact on core inflation. During the last five quarters, the CPI core, excluding petrol, diesel, gold and silver, has remained mostly below the price inflation target of 4%, Singh added.