India’s CPI inflation decelerated to a 67-month low of 3.34% YoY in Mar-25 from 3.61% in Feb-25
Download ReportQuantEco Research || Mar-25 CPI inflation: All’s well that ends well
The annual inflation for FY25 came at 4.6%. This is marginally below RBI’s estimate of 4.7%. More importantly, it is the lowest inflation in the post COVID phase that saw inflation averaging at 5.9% between FY21 and FY24. Although the weather has played spoilsport in recent years, the short-term outlook appears comfortable amidst robust progress for zaid crop sowing and expectation of a normal monsoon outturn. Meanwhile, the upside risk to inflation would stem from the government’s recently announced price hike for LPG cylinder along with cascading impact of INR depreciation on imported inflation. It is likely that some of these upside risks would get offset by the softness in international commodity prices, which could persist in the backdrop of a highly uncertain world trade environment weighing upon global demand. Considering a multitude of factors and their associated risks, we maintain our FY26 CPI inflation call of 4.1% for now.