New Delhi, December 14, 2024: India’s Consumer Price Index (CPI) inflation is forecasted to ease to 4.7-4.8% during the fiscal year 2025 (FY25), primarily driven by a significant reduction in food prices. After several months of rising inflation due to high food costs, this projected decline offers some relief. Experts suggest that the moderation in food prices will play a key role in stabilizing the overall inflation rate. In particular, food inflation, which was a major contributor in the previous year, is expected to cool down, helping CPI inflation to stabilize moving forward.
Alongside the easing of food prices, inflationary pressures in other sectors, including fuel and manufacturing, are also predicted to subside. The government’s efforts to stabilize essential prices, combined with favorable monsoon conditions, have contributed to a more optimistic inflation outlook. This reduction in inflationary pressure is expected to provide the government and the Reserve Bank of India (RBI) with greater flexibility to focus on economic growth while ensuring price stability.
This improved inflation outlook is expected to have significant implications for both monetary policy and economic planning in FY25, offering policymakers more room to support growth without risking excessive inflation.
