Date: 15-apr-2025 | By: Nuztrend Team
Photo by Charles Gao on Unsplash
India’s retail inflation cooled down significantly to 3.34% in March 2025, marking its lowest level in nearly six years, according to official government data released on April 15, 2025. The last time inflation was this low was in August 2019.
This decline in inflation, measured by the Consumer Price Index (CPI), is seen as a positive sign for the Indian economy, offering relief to both consumers and policymakers. The sharp fall was largely attributed to easing food prices across multiple categories.
Food inflation, which accounts for nearly half of the CPI basket, fell to 2.69% in March 2025, down from 3.75% in February. This decline was driven by lower prices of vegetables, eggs, pulses, and other essential commodities.
Economists have credited stable supply conditions, better crop output, and government interventions for the reduction in food price volatility.
The fall in inflation is expected to give the Reserve Bank of India (RBI) more room to maintain its accommodative monetary policy stance. In its recent review, the RBI kept interest rates unchanged but highlighted its commitment to supporting growth while keeping inflation in check.
With inflation moving comfortably within the RBI's target range of 2% to 6%, experts suggest that future rate cuts may be possible if this trend continues, especially with forecasts of an above-average monsoon this year.
The slowdown in retail inflation is likely to boost consumption and support India's economic recovery in 2025. However, economists have cautioned that global uncertainties, crude oil prices, and potential supply chain disruptions remain key risks to watch in the months ahead.
Overall, the easing of inflation offers some breathing space for households and could encourage further economic activity as the country moves into the next financial quarter.
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