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Lower Inflation print brightens up rate cut prospects


CPI inflation came down sharply to 3.6% in February 2025, lower than market expectation of around 3.9% and 4.3% in January 2025.
Food inflation which was the major contributor has continued its declining trend in last 4 months. Food inflation is now at 3.7% versus 6.0% in January and is down from highs of 10.9% in October 2024.
Core inflation came marginally higher on expected lined at 4.0% in Feb vs 3.7% in Jan25.
Within Food, Vegetables inflation witnessed a de-growth of 1.0% due to higher base and continuous decline on month-on-month basis since last 4 months. Apart from vegetables, pulses also saw de-growth of 0.4% while spices continue to witness decline on a higher base.
Outlook remain favourable for both food and non-food inflation due to fresh crop arrival and lower crude oil prices. The expectation of a rate cut in April 2025 MPC meeting has got cemented with current inflation print.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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