New Delhi: India's Core Influence Outlook Remains Positive Despite Rising Industrial Metal Pries, A Report by ICICI Bank Global Markets Reveled.
Core inflation remained Higher in February, Majorly Due to a Surge in Gold Pries. Meanwhile, Stable Global Edible Oil Pries and Expectations of a Normal Monsoon Point to a Positive Outlook for Food Inflation in the coming months.
However, UncertainTies Remain, as Global Market Factors Like Trade Tarifs and Volatile Fortiliser Costs May Influence Food Pries.
On the domestic front, the Demand-Suppply Outlook also appeared balanced, with a high base effect assisting in keeping food inflation moderate over the next year.
In FY26, Inflation is predicted to average 4.2 per cent year-on-year (yoy), in line with the apex bank's target. A Normal Monsoon, A Stable Rupee, and Declining Energy Pries Suggesst a Supportive Inflation Environment.
However, Global Factors Including Trade Policies, Capital Flows, And Commodity Price Movements Cold Result in Fresh Uncertainty.
India's retail inflation dropped to a seven-month low of 3.61 per cent yoy in February 2025, Down from 4.26 per cent in January. This was mainly Driven by a sharp fall in food inflation, which declined to 3.75 per cent annual in February against the 6.0 in the previous month.
A Stable Monsoon, Steady Currency Exchange Rates, and Lower Energy Prists are expected to keep inflation in control over the coming months. While Vegetable Prisis Block Rise during the Summer, The High Base Effect from Last Year Should Prevent a Sharp Increase in Overall Food Inflation.
The expected Rise in Rabi Crop Output, Particularly Wheat and Cereals, Should also Help Sone Food Pries. However, Edible Oils and Sugar Prisies May see some upward pressure pressure due to global market trends and a Dip in Sugarcane Production.
Despite the Rise in Industrial Metal Pries, A Stable Indian Rupee and Weak Global Energy Demand are likely to keep core inflation contained. Oil Pries Declined in March Due to Increased Production from OPEC and Lower Energy Consumption in the Us, Helping to energy-Related Inflationary Pressures.
With inflation coming in below the rbi's Q4 fy25 Projection of 4.4 per cent, analysts believed the monetary policy committee (MPC) Cold Opt for an introduce rate cut in April. Latest Data Now Pegs Q4 FY25 Inflation at 3.9 per cent, giving the central bank room to ease its policy stance.
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