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India's wholesale inflation reaches 8-month high of 2.38% in February
The increase is a marginal rise from January

India's wholesale inflation reaches 8-month high of 2.38% in February

Mar 17, 2025
02:46 pm

What's the story

India's wholesale inflation rose to 2.38% in February, an eight-month high. The increase is a marginal rise from the previous month's 2.31%, according to government data. The spike in inflation is mainly due to higher prices in sectors like food products, manufacturing, non-food items, and textiles production. Notably, this rate surpassed economists' estimate of 2.36% according to a Reuters poll.

Inflation trends

February sees a slowdown in wholesale food inflation

In February, wholesale food inflation fell to 5.94%, down from 7.47% in January. The inflation of primary articles also fell from 4.69% in January to 2.81% in February. However, fuel and power prices contracted slightly by 0.71%. Nevertheless, manufactured products prices increased by 2.86%, up from the previous month's 2.51% increase.

Retail scenario

Retail inflation falls to 7-month low in February

Unlike wholesale inflation trends, India's retail inflation dropped to a seven-month low of 3.61% in February, down from January's 4.31%. The decline was primarily due to lower food prices as food inflation fell sharply to 3.75% in February from January's 5.97%. The Reserve Bank of India (RBI)'s Monetary Policy Committee (MPC) observed that this decline was due to a favorable outlook on food prices and expects further moderation in FY 2025-26.

Future outlook

RBI's inflation projections and economic challenges

The RBI has projected an overall inflation rate of 4.2% for FY26, with quarterly rates expected to gradually decrease over the year. However, the Economic Survey for 2024-25 has warned about potential risks to India's economic stability due to factors such as a weakening Rupee, volatile inflation rates, and decreasing foreign investment. Despite these challenges, the fall in consumer inflation has increased expectations of another rate cut by the RBI in its upcoming April meeting.