Retail inflation drops to 4.31% in January, driven by slower food price rise

India’s retail inflation cooled to 4.31% in January, marking a significant drop from 5.22% in December. The decline was primarily fueled by a slowdown in food price increases, offering some relief to consumers.

This downward trend is a positive sign for the Reserve Bank of India (RBI), which recently cut the repo rate by 25 basis points to 6.25% in an effort to support economic growth. Just a few months earlier, in October, inflation had surged to a 14-month high of 6.2%, with food inflation reaching a 15-month peak of 10.9%.

The easing inflationary pressures could influence future monetary policy decisions, potentially setting the stage for further rate adjustments.