India’s retail inflation drops to 4.1 per cent in February, according to BOB report

New Delhi: According to a Bank of Baroda (BoB) analysis, India’s consumer price inflation (CPI) is predicted to drop to 4.1% in February 2025. The survey did, however, warn that several variables, including increasing global edible oil costs, inflationary tariff measures, and an expected hotter summer, might keep food prices high.

“We anticipate the CPI to stabilize at 4.1% on February 25th,” it said. We can not, however, fully rule out the possibility that higher global costs for edible oil may put upward pressure on food prices.

Key home items are tracked by the BoB Essential Commodity Index (BoB ECI), which likewise indicated a slowdown in February, easing to 2.4% year over year. The primary cause of this reduction was the decline in the cost of vegetables like potatoes and tomatoes.

Additionally, because of better supply circumstances, pulse inflation stayed under control. A recent drop in milk costs added to the general trend of declining inflation.

several hazards still exist even when inflation has decreased in several sectors. Since energy costs have been low, global asset price volatility—especially in gold and base metals—has not yet had a major effect on inflation.

But in the next months, metal tariffs may raise costs. Prices for metals like copper and zinc rose in February as a result of increasing demand.

The analysis raises serious concerns about the ongoing high costs of edible oil, which may contribute to further increases in food inflation.

Extreme heat may also cause important crops to experience supply problems.
States like Maharashtra, Odisha, and Bihar—which are important producers of potatoes, tomatoes, and onions, respectively—have already had temperatures above average, according to the Indian Meteorological Department (IMD).

The paper stressed the need for closely monitoring temperature conditions, particularly for wheat crops that may be harmed by increasing temperatures. Nonetheless, some respite is anticipated from government initiatives to enhance logistics and maintain perishable product pricing.

Even though inflation is predicted to decline, price patterns in the next months may be impacted by weather and global commodity price uncertainty.