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February 2025 CPI drops to 4.1% due to slower increase in tomato and potato prices, with potential global risks. File
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The Consumer Price Index (CPI), that measures general price levels, may have dropped to a seven-month low of 4.1% in February 2025 from 4.3% last month on slowing increase in tomato and potato prices, according to data from Bank of Baroda.
CPI inflation had come in at 3.6% in August 2024. Reserve Bank of India’s inflation targeting framework mandates CPI inflation to be between 2% and 6%.
The Bank of Baroda observed a broad slow down in price hike and moderation in vegetable prices inflation in its research.
This was mostly attributed to improvement in arrivals of tomato and potato in the harvest season. The Essential Commodities Index (ECI), constructed by BoB research showed a further deflation of 28.9% for tomato and inflation slowing to 16.4% for potato in February 2025. In the previous month, tomato prices had shrunk 5.3% and potato inflation at 34.8% in the ECI. To be sure, the kitchen staples recorded slightly higher inflation in January 2025 according to CSO data. Potato inflation slowed by 49.6% and tomato prices deflated 7% in January 2025.
In addition to the two vegetables, milk and kerosene prices also registered a slower increase in the BoB index, prompting a CPI forecast of about 4.1%.
The projection however came with a caveat of higher CPI inflation owing to global risks. “We expect CPI to settle at 4.1% in February 25. 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,” said Dipanwita Mazumdar Economist at BoB research in her note.
Ministry of Statistics and Programme Implementation will release the CPI inflation data for February 2025 on March 12.
Published – March 06, 2025 10:51 pm IST
