The Reserve Bank of India on Wednesday revised its inflation forecast for the current financial year, lowering it to 4% from the earlier projection of 4.2%. The revision reflects favorable factors such as robust agricultural output and declining crude oil prices.

Headline retail inflation, measured by the Consumer Price Index (CPI), fell significantly by 1.6 percentage points over January and February 2025—from 5.2% in December 2024 to 3.6% in February 2025.

This sharp decline was largely driven by a seasonal dip in vegetable prices, which helped bring food inflation down to 3.8% in February—its lowest level in 21 months.