BOB Report: Retail inflation may come below three percent, fall in food prices is the result of better management

Once they have received the respite from the high rates of interest, now the common man is likely to get the benefit from the decrease in inflation as well. As seen from the report of the Bank of Baroda, the retail inflation is expected to dip below three percent in the figures of April. It will come out next week. For the past some time, there has been sharp fall in the prices of vegetables and pulses, which will influence the retail inflation.

According to the report, the reduction in retail inflation will give RBI more opportunity to cut rates. There may be a bigger cut in the repo rate in the meeting to be held in June. The heat has decreased in tomato, onion and potato producing states. The retail price of tomato has fallen to the lowest since August, 2024. It has decreased by 34.4% year-on-year in April, 2025. Potato and onion prices have decreased by 11% and 5.7% respectively in April, 2025 on an annual basis.

The retail price of rice has decreased by 4.1% in April as compared to March. Although the prices of edible oils have increased, it is not in a position to affect retail inflation. There is a tremendous decline in the prices of tomatoes, onions and potatoes.

Department of Consumer Affairs Secretary Nidhi Khare said that the decline in food prices is the result of better management of the government. Last year, due to El Niño and heavy heat, the production and arrival of crops were affected. This led to inflation. However, yellow peas and gram had to be imported, which increased availability. To reduce the prices of onion and pulses, the government sold it to the customers at cheap prices. Now the heat is right, the forecast of rain is good, so the prices of vegetables along with the production of pulses are expected to remain under control.