Retail inflation declines to 7 month low of 3.61% in February
Retail inflation has come down to 3.61% in February 2025 due to the cheaper pulses and vegetables. This is the lowest level of inflation in 7 months. Inflation was at 3.54% in July 2024. At the same time, inflation was 4.31% in January 2025. The Ministry of Statistics released the inflation figures today on March 12.
Food items contribute about 50% to the inflation basket. Its inflation has come down from 5.97% to 3.75% on a month-on-month basis. At the same time, rural inflation has come down from 4.59% to 3.79% and urban inflation has come down from 3.87% to 3.32%.
How does inflation affect?
Inflation is directly related to purchasing power. For example, if the inflation rate is 6%, then the value of Rs 100 earned will be only Rs 94. Therefore, investment should be made keeping inflation in mind. Otherwise, the value of your money may decrease.
How does inflation increase and decrease?
The increase and decrease of inflation depends 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.
This way the market comes under the grip of inflation. In simple words, excessive flow of money or shortage of things in the market causes inflation. On the other hand, if the demand is less and the supply is more, then inflation will be less.
