India’s retail inflation falls to pre-pandemic levels, lowest since August 2019

India’s retail inflation fell to a five-year low of 3.34 per cent in March, according to official data.

In March, the inflation fell to the lowest since August 2019 when it stood at 3.28 per cent.

In March, the inflation fell for the second straight month on the back of subdued food prices. In February, the inflation stood at 3.61 per cent.

The food inflation fell to 2.69 per cent from 3.75 per cent in February.

For two months now, the inflation has been under the Reserve Bank of India’s (RBI) acceptable upper limit of 4 per cent.

By the end of the year, the RBI has projected that the annual inflation would fall under the 4 per cent. In 2024-25, the annual inflation stood at 4.6 per cent.

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The RBI has revised the projection for first quarter’s inflation to 3.6 per cent from 4.5 per cent and to 3.9 per cent from 4 per cent for the second quarter.

The lower inflation is expected to enable RBI to pursue a more aggressive rate policy.

The inflation in March, which is lowest in more than five years, is in sharp contrast to October 2024 when the inflation had reached 14-month high of 6.21 per cent. At the time, food inflation had climbed to 10.9 per cent — going into double digits for the first time in 15 months. The main drivers of inflation at the time were rising food prices — the vegetable inflation was at a nearly five-year high of 42.4 per cent.