India's retail inflation falls to 3.34 per cent in March, lowest level since August 2019

Food inflation, during March, slowed to 2.69 per cent, which is the lowest level since November 2021.

The significant decline in headline inflation and food inflation during the month of March 2025 is mainly attributed to decline in inflation of vegetables, eggs, pulses, meat & fish cereals and milk, according to the official statement.

The key items with the lowest year-on-year inflation in March are ginger (-38.11 per cent), tomato (-34.96 per cent), cauliflower (-25.99 per cent), jeera (-25.86 per cent) and garlic (-25.22 per cent).

The year-on-year housing inflation rate for the month is 3.03 per cent. Corresponding inflation rate for the month of February, 2025 was 2.91 per cent. The housing index is compiled only for the urban sector.

Fuel & light inflation rate for March is 1.48 per cent. While the education inflation rate for the month is 3.98 per cent, the figures showed.

Retail inflation in the country has been on a declining trend in recent months. The Reserve Bank's Monetary Policy Committee has reduced its inflation forecast for 2025-26 to 4 per cent from 4.2 per cent earlier as the "outlook for food inflation has turned decisively positive", RBI Governor Sanjay Malhotra said last week.

"Headline inflation moderated during January-February 2025 following a sharp correction in food inflation. The outlook for food inflation has turned decisively positive. The uncertainties regarding rabi crops have abated considerably, and the second advance estimates point to a record wheat production and higher production of key pulses over the last year," he said.

The RBI Governor observed that along with robust kharif arrivals, this is expected to set the stage for a durable softening of food inflation.

"The sharp decline in inflation expectations in our latest survey for three months and one year ahead would also help anchor inflation expectations, going ahead," he pointed out.

Furthermore, the fall in crude oil prices augurs well for the inflation outlook. Concerns on lingering global market uncertainties and recurrence of adverse weather-related supply disruptions, however, pose upside risks to the inflation trajectory, the RBI Governor said.

He said that taking all these factors into consideration, and assuming a normal monsoon, CPI inflation for the financial year 2025-26 is projected at 4.0 per cent, with Q1 at 3.6 per cent, Q2 at 3.9 per cent, Q3 at 3.8 per cent, and Q4 at 4.4 per cent. The risks as evenly balanced, he maintained.