Retail inflation may rise to 3.8%-4% in March. A month earlier, in February, inflation fell to a 7-month low of 3.61%. At the same time, inflation was 4.31% in January 2025. The Ministry of Statistics will release inflation figures tomorrow i.e. Tuesday, April 15.
There is a mixed trend in vegetable prices, while gold prices are continuously increasing. That is, food inflation is expected to remain stable, but inflation of other things may increase slightly. Food items contribute about 50% to the inflation basket.
Retail inflation in February:
Inflation fell to a 7-month low of 3.61% in February.
Food inflation declined from 5.97% to 3.75% on a month-on-month basis.
Rural inflation decreased from 4.59% to 3.79% and urban from 3.87% to 3.32%.
How does inflation increase and decrease?
Inflation increases and decreases depending on the demand and supply of the product. If people have more money, they will buy more things. Buying more things will increase the demand for things and if the supply is not according to the demand, the price of these things will increase.
In this way the market comes under the grip of inflation. In simple words, excessive flow of money in the market or shortage of things causes inflation. On the other hand, if the demand is less and the supply is more, then inflation will be less.
Inflation is determined by CPI
As a customer, you and I buy goods from the retail market. The Consumer Price Index i.e. CPI does the work of showing the change in prices related to this. CPI measures the average price we pay for goods and services.
Apart from crude oil, commodity prices, manufactured cost, there are many other things which play an important role in determining the retail inflation rate. There are about 300 items on the basis of whose prices the retail inflation rate is decided.
