Retail inflation declines to 4.31% in January

Retail inflation eased to 4.31 per cent in January, primarily driven by lower food prices, according to official data released on Wednesday. This represents a 91 basis point decline in headline inflation compared to the previous month, marking the lowest year-on-year (YoY) inflation since August 2024.

A Reuters poll had earlier projected January inflation at 4.6 per cent, indicating a continued decline that brings inflation closer to the middle of the Reserve Bank of India’s (RBI) tolerance band of 2-6 per cent. This reduction in inflation is also likely to be welcomed by the RBI, which recently lowered the repo rate by 25 basis points to 6.25 per cent to stimulate economic growth.

Food inflation, as measured by the Consumer Food Price Index (CFPI), recorded 6.02 per cent in January 2025, marking its lowest level since August 2024. In comparison, food inflation was at 8.39 per cent in December 2024.