India Tasa De Inflación

The annual inflation rate in India fell to 4.31% in January of 2025 from 5.22% in the previous month, sharply below market expectations that it would fall to 4.6% to mark the softest rate of price growth since August of last year. The result marked a fast approach to the RBI’s target rate of 4% after four consecutive periods of inflation above the 5% threshold, supporting the case for the central bank to continue cutting interest rates and supporting commercial banks with liquidity. The drop was primarily due to a deceleration in food prices (6.02% vs 8.4% in December 2024), which makes up around half of the Indian consumer price basket, due to softer inflation for vegetables (11.35% vs 26.56%). In the meantime, deflation persisted for fuel and light (-1.38% vs -1.39%) and inflation remained steady for housing (2.76% vs 2.71%). From the previous month, the Indian CPI fell by 0.97%.