FOOD PRICES
Rise of the Premium League: Consumers embrace luxury choices despite price hikes
Despite economic challenges, demand for premium products such as groceries, spirits, clothing, and shoes remains strong in cities. Companies like Hindustan Unilever and Diageo India report continued growth in the premium segment. Higher-income consumers are driving this trend, with spending on international vacations and weddings also reflecting resilience.
On boil in 2024, food inflation seen cooling
Experts believe that the chance of a rate cut during the MPC's next meeting on February 5-7 has now diminished. "If food inflation had not been so high, there could have been a rate cut," said Joshi, adding that rupee depreciation is also weighing on MPC decision.
RBI predicts stronger economic growth in H2 FY25, driven by demand rebound and rural resilience
RBI economists predict faster economic growth in the second half of the fiscal year, driven by rural demand, public infrastructure investment, and easing inflation. However, food price stickiness and rising input costs in manufacturing pose risks. Private consumption, particularly through ecommerce, is anticipated to further stimulate the economy.
Working to stabilise food prices: Min
Calibrated import and export policies, along with incentives for domestic production, have maintained price stability benefiting consumers and farmers. Measures such as tweaking export policies for onions and removing procurement ceilings for pulses have successfully moderated CPI pulses inflation from 19.54% in January 2024 to 3.83% in December 2024.
RBI flags sticky food inflation despite signs of price moderation
RBI economists caution that persistent food inflation, amidst rising rural wages and corporate salaries, requires ongoing monitoring. While December's CPI eased to 5.2%, food inflation remains high. Economic growth is anticipated to accelerate in H2, driven by demand rebound and public capex. Uncertainty clouds the future interest rate path, with RBI¡¯s next review on February 7.
Centre says closely monitoring food prices
The central government of India is closely monitoring food prices and availability to ensure consumers' affordability and a stable price regime. Measures include boosting domestic production and adjusting import-export policies. A good monsoon predicts increased production of pulses and onions, contributing to lower food inflation which moderated to 8.39% in December 2024.
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A slice of relief for Indians this year - tomato, onion & pulses' prices are falling
Prices of common vegetables and staples such as tomatoes, potatoes, onions, rice, and pulses dropped up to 40% in early 2025 due to fresh produce arrivals, better Kharif harvest, and increased imports. This decline helps ease household budgets and reduces retail inflation to a four-month low of 5.22%.
High manufacturing cost led to surge in WPI inflation in December: Report
A report by ICICI Bank attributes the surge in December's wholesale inflation to increased manufacturing inflation, with 18 out of 22 manufacturing sub-components recording positive inflation. Notably, manufactured food inflation reached a 32-month high, while non-metallic mineral products and basic metals witnessed negative inflation. Potential risks include higher international crude oil and industrial metal prices.
Fuel, non-food goods drive wholesale inflation to 2.4% in December
India's wholesale price inflation increased to 2.4% in December from 1.9% in November. This rise was due to higher costs of fuel, power, and non-food articles. Inflation in manufactured goods and primary articles also saw an uptick. However, food inflation eased slightly, with vegetable prices seeing a significant surge.
India's wholesale inflation quickens to 2.37% in December even as food bills stay steady
India's wholesale inflation increased to 2.37% in December from 1.89% in November, driven by slower food price rises. Retail inflation eased to 5.22% from 5.48% in the same period. The RBI downgraded growth forecasts, raising inflation estimates due to concerns over food inflation.
Dec retail inflation hits 4-mth low of 5.2% as food prices cool
India's retail inflation fell to 5.2% in December due to lower food prices. Economists are divided on the possibility of a rate cut in February. The rupee's depreciation adds uncertainty. The Reserve Bank's next Monetary Policy Committee meeting is from February 5-7. Core inflation was at a three-month low of 3.6% in December.
Budget 2025: A close look at India¡¯s Inflation trends ahead of Sitharaman¡¯s key policy moves
Finance Minister Nirmala Sitharaman's 2025 Budget will focus on managing inflation, a key concern for policymakers. Despite moderation in H1, inflation hit a 14-month high of 6.21% in October due to food price surges.
India¡¯s retail inflation eases to a four-month low of 5.22% in Dec on easing food costs
India's retail inflation eased to 5.22% in December from 5.48% in November, driven by moderating food prices. Food inflation, a major contributor, has begun to cool due to a bumper summer harvest, despite earlier spikes from unseasonal rains and rising edible oil and cereal prices.
India's inflation likely to stabilise around 4.3-4.7 pc in FY26: Report
Inflation in India is expected to stabilize at an average of 4.3-4.7 per cent in FY26. Food prices are likely to moderate and agricultural output to stabilize. Monetary policy adjustments, including rate cuts, are anticipated to support economic stability. Core inflation trend is forecasted to be stable, with a 25-basis point reduction in the repo rate expected in FY25.
MoF scans retail inflation variations across states
The finance ministry is conducting an analysis of retail inflation to understand interstate variations and suggest corrective actions. While many states had lower inflation than the national average, issues like limited crop output and supply chain disruptions contribute to higher inflation in others.
Prices of tomato, potato in bitter taste; home-cooked meals get costlier in December: Report
Prices of home-cooked meals rose in December due to dearer tomato and potato prices. The average cost of preparing a vegetarian thali increased by 6 percent compared to last year. The cost of a non-vegetarian thali rose by 12 percent. Tomato and potato prices surged, while broiler costs also contributed to the increase.
Urban-rural consumption gap closes further in 2023-24
Consumption inequality between rural and urban India decreased in 2023-24, with notable increases in Monthly Per Capita Consumption Expenditure (MPCE) in both areas. Non-food items continued to dominate expenditures. Government support contributed to rural growth, and social welfare programmes impacted overall consumption patterns.
MoSPI releases discussion paper on treatment of PDS items in CPI
The ministry of statistics and programme implementation invites views on including free PDS items in retail inflation calculation as the CPI base year changes to 2024. The consultation addresses issues arising from the National Food Security Act's new scheme and its impact on current price indexes. Inputs are requested by January 15.
Expected decline in food prices in January could increase odds of rate cut in Feb: ICICI Bank
The Reserve Bank of India's Monetary Policy Committee may consider a rate cut in February if food inflation declines in January. Lower food prices could support economic growth, with some members advocating for easing rates. Meanwhile, the Indian rupee faces depreciation pressure due to a strong US dollar.
Weather, rise in international agricultural commodity prices pose upside risks to food inflation, warns RBI in MPC Minutes
The Reserve Bank of India (RBI) maintained its repo rate at 6.50% while acknowledging softening food inflation. However, the MPC minutes cautioned about upside risks from weather and global commodity prices. The RBI emphasized its commitment to controlling inflation amidst global economic stability but with persistent geopolitical uncertainties.
Inflation-growth balance 'somewhat unsettled: Shaktikanta Das
The Reserve Bank of India's monetary policy committee held rates steady in early December, prioritizing inflation control over growth concerns. Two members dissented, favoring a rate cut due to slowing growth and low core inflation, while others emphasized the need to address rising food prices and global uncertainty.
Wholesale inflation drops to 1.9% in November as food prices cool
India's wholesale price inflation eased to 1.9% in November, down from 2.4% in October, due to moderating food prices. Retail inflation also slowed to 5.5% in November. Experts predict further easing and potential rate cuts by the Reserve Bank of India. While core inflation remained subdued, food inflation, particularly in manufactured food products and oils, remains elevated.
India's per capita availability of fruits and vegetables increases by 7 kg and 12 kg over last decade: Report
India's fruit and vegetable availability has increased, exceeding recommended levels, yet 30-35% is lost due to supply chain inefficiencies. Extreme weather impacts production, while easing retail inflation is attributed to falling vegetable prices, though food prices remain a key inflation driver. Inflation across states is converging towards 4%, influenced by labor migration.
India's CPI inflation to ease to 4.7-4.8 pc in FY25, driven by lower food prices: Report
India's CPI inflation is projected to be around 4.7-4.8% for FY25, due to easing food inflation and stable global commodity prices. Favorable harvests and benign global food and energy prices contribute to this positive outlook. November 2024 CPI inflation moderated to 5.5%, with vegetable inflation dropping significantly. This trend may lead to a more accommodative monetary policy by the RBI.
Food inflation in richer states cooling down faster
The State Bank of India reports that food inflation has fallen more sharply in wealthier Indian states than in poorer ones over the last decade. Labor migration to wealthier regions is cited as a contributing factor, impacting regional inflation rates and highlighting the need for targeted policy interventions.
India¡¯s retail inflation eases to 5.48% in Nov from 6.21% in Oct as food prices moderate
India's retail inflation eased to 5.48% in November, down from 6.21% in October, driven by moderating vegetable prices and stabilized edible oil costs. The RBI's Monetary Policy Committee raised inflation estimates to 4.8% for the fiscal year.
ADB lowers India's GDP growth forecast to 6.5 pc for FY25
The Indian economy continues to face downside risks from geopolitical threats to supply chains and adverse weather conditions, according to ADB. "The forecast for FY2025 has been reduced slightly due to lower-than-expected growth in private investment and housing demand, due to tight monetary policy aimed at combating inflation," the Manila-headquartered lender said in its December outlook.
India's CPI inflation likely to ease to 5.5% in Nov from 6.2% in Oct: Morgan Stanley
India's Consumer Price Index (CPI) inflation is expected to decrease to 5.5% year-on-year in November, down from 6.2% in October, according to Morgan Stanley. This decline is primarily driven by falling food prices and a slowdown in core CPI, which excludes food and fuel. A report by Union Bank of India also predicts a decline in CPI inflation to 5.4%, citing a drop in vege
Inflation horse needs a tight leash: RBI Guv Shaktikanta Das
The Reserve Bank of India held the repo rate steady at 6.5%. Governor Shaktikanta Das stressed the bank's focus on managing inflation. The FY25 inflation forecast was raised to 4.8%. Das used a horse analogy to describe inflation control efforts. He acknowledged the difficulty of curbing inflation. The bank aims to balance inflation control with economic growth.
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