Retail inflation is expected to settle at 4.1 per cent in February 2025, helped by the sharp downward corrections in vegetable prices, according to an assessment by Bank of Baroda’s (BoB) economic research department (ERD).
The ERD noted that the BoB Essential Commodity Index (BoB ECI) continued its deceleration in February 2025 as well, moderating to 2.4 per cent, on Year-on-Year (yoy) basis.
“The major downward correction was visible in case of vegetables such as tomato and potato. Inflation in major categories of pulses have also remained in check supported by a better supply side dynamics. The slashing of milk prices will further lend support to overall CPI print,” said Dipanwita Mazumdar, Economist, BoB.
She observed that the global volatility in major asset prices such as gold, base metals has not yet fed into inflation, as energy prices have largely remained on the lower side.
“We expect CPI to settle at 4.1 per cent in February 2025. However, we completely do not rule out any upside pressure on food prices arising from stickier edible oil prices globally, inflationary tariff policies worldwide and anticipation of hotter summer,” Mazumdar said.