Retail inflation for the month of January softened to 4.3% compared to 5.22% in December. The moderation in retail inflation was driven mainly on account of food prices falling with the January Consumer Food Price Index (CFPI) coming in at 6.02% compared to 8.3% in the same last year.
The top five items showing highest year on year Inflation at All India level in January 2025 are Coconut oil (54.20%), potato (49.61%), coconut (38.71%), garlic (30.65%), peas [vegetables] (30.17%), the official release showed.
On the other hand the top five items with lowest inflation in January, 2025 are jeera (-32.25%), ginger (-30.92%), dry chilies (-11.27%), brinjal (-9.94%), LPG (excl. conveyance) (-9.29%).
Vegetable prices which kept the overall headline inflation numbers high cooled in January.
"The significant decline in headline inflation and food inflation during the month of January, 2025 is mainly attributed to decline in inflation of Vegetables, Egg, Pulses & Products, Cereals and Products, Education, Clothing and Health," the official release said.
The fall inflation will come as a relief to consumers and is likely to open up room for the RBI to consider another rate cut.
The RBI had slashed the repo rate by 25 basis points in its February monetary policy review. The RBI projects retail inflation at 4.2% for the next fiscal year FY26.
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