Retail Inflation Hits Six-Year Low

Retail inflation decreased to a near six-year low of 3.34% in March 2025, driven by lower prices in vegetables and proteins, marking its lowest since August 2019. Despite this, the Reserve Bank forecasts a moderate rise in inflation rates over the fiscal year 2025-26.

Retail inflation has reached a near six-year low in March 2025, registering at 3.34% due to a significant decline in prices of vegetables and proteins. This marks the lowest inflation rate since August 2019, when it was 3.28%.

The Consumer Price Index (CPI) based inflation in February was higher at 3.61%, while March of the prior year witnessed a rate of 4.85%. Food inflation specifically saw a significant drop to 2.69% in March compared to 3.75% in February, and a stark contrast from 8.52% in March 2024.

In light of easing inflation, the Reserve Bank has cut the key short-term lending rate by 25 basis points. The bank projects CPI inflation for the current fiscal year to stabilize around 4%, with estimates for upcoming quarters looking stable. Concurrently, wholesale price inflation also dipped to a six-month low of 2.05% in March.