Comment on India's retail inflation at seven month low by Ajay Garg, CEO, SMC Global Research
Below the Comment on India's retail inflation at seven month low by Ajay Garg, CEO, SMC Global Research
India’s retail inflation fell to a seven-month low of 3.61% in February 2025. This was largely driven by a drop in food inflation to 3.75%, the lowest since May 2023. This paves the way for RBI to consider another rate cut in 2025 and fuel economic growth. The downward trend seen in both rural and urban inflation will provide relief to households, leading to higher spending and investment. The cost pressures on the companies will also reduce, and their muted earnings in the last few quarters can also revive. With a drop in inflation, sectors such as FMCG and automobiles could benefit from higher spending by consumers. Overall, India’s steady GDP growth, rise in IIP (Index of Industrial Production), and tax rebates provided in the Union Budget are significant boosters for the Indian economy amidst global uncertainties.
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