India’s inflation rate has fallen below 4.31% for the first time in five months, a significant drop from December’s 5.22%, according to government data released on February 12.
This sharp decline comes just a week after the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) announced its first rate cut in five years. The policy rate now stands at 6.25%, down from 6.5%.
Experts predict inflation will continue to ease in the coming months. The RBI projects an average of 4.4% in the fourth quarter, stabilizing at 4.5% in Q1 FY25, dipping further to 4% in Q2, and reaching 3.8% in Q3.
However, a deeper look into historical trends suggests that inflation rarely stays around the RBI’s 4% target for long. Since the MPC’s inception in July 2016, inflation has only hovered around 4% (within a 0.3% range) in just 13 out of 102 months—and never for more than two consecutive months.
Will this trend finally break, or is another inflation surge around the corner? Stay tuned for expert insights!
