India’s retail inflation drops to 4.6% in Jan, industrial growth slows to 3.2%
New Delhi: India's retail inflation eased to 4.6% in January 2025, down from 5.22% in December, as food price pressures subsided.
This 91-basis-point drop marks the lowest annual inflation rate since August 2024, bringing it closer to the Reserve Bank of India’s (RBI) target range of 2-6%.
The decline follows the RBI’s recent 25-basis-point cut in the repo rate to 6.25% to support economic growth.
Among key commodities, jeera prices fell by 32.25% year-on-year, while ginger became 30.92% cheaper.
Dry chilies, brinjal, and LPG (excluding conveyance costs) also saw price declines of 11.27%, 9.94%, and 9.29%, respectively.
At the same time, India’s industrial output growth slowed to 3.2% in December, down from 5.2% in November.
Among major sectors, mining expanded by 2.6%, manufacturing grew by 3.0%, and electricity generation rose by 6.2%.
Despite the overall slowdown, basic metals output increased by 6.7%, electrical equipment production surged by 40.1%, and coke and refined petroleum products rose by 3.9%, helping to offset some of the decline.
The RBI has maintained its CPI-based inflation forecast at 4.8% for FY25, expecting a further decline to 4.4% in Q4FY25.
For FY26, inflation is projected at 4.2%, with estimates of 4.5% in Q1FY26, 4% in Q2FY26, 3.8% in Q3FY26, and 4.2% in Q4FY26.
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