February 2025 CPI Data Out: Overall Inflation Eased to 3.61%, While Housing Inflation Soared to 2.91%

Inflation has been a key economic indicator in India, and the latest data for February 2025 reveals noteworthy trends across various sectors. Based on the All India Consumer Price Index (CPI), year-on-year inflation has seen a marked decrease. In this blog, we will explore the key inflation trends for February 2025:

Headline Inflation Trends

The year-on-year inflation rate, measured by the All India Consumer Price Index (CPI), for February 2025 stands at 3.61%. This marks a significant decline from January 2025, when the inflation rate was higher. February’s inflation rate represents the lowest recorded since July 2024, signalling a decrease of 65 basis points when compared to the previous month. This reduction suggests a gradual easing of price pressures across the economy.

Food Inflation Insights

The All India Consumer Food Price Index (CFPI), which tracks food inflation, saw a year-on-year inflation rate of 3.75% for February 2025. While food inflation is still positive, it reflects a notable decrease from January 2025, when food inflation was higher. A sharp decline of 222 basis points from January 2025 to February 2025 means that food inflation is now at its lowest since May 2023.

Sector-Specific Inflation Trends

• Housing Inflation: The year-on-year housing inflation rate for February 2025 is 2.91%, slightly higher than the 2.82% observed in January 2025. Housing inflation is specific to the urban sector, indicating that urban areas are seeing relatively stable price increases in housing.
• Fuel and Light Inflation: The inflation rate for fuel and light stood at -1.33% in February 2025, showing a marginal improvement over the -1.49% in January 2025. The negative inflation in this category suggests a decrease in fuel and energy costs across the country.
• Education Inflation: Education inflation remained stable, with a year-on-year rate of 3.83% in both February and January 2025. This indicates that educational costs are rising at a steady pace.
• Health Inflation: The year-on-year inflation rate for health services increased slightly to 4.12% in February 2025 from 3.97% in January 2025. This rise highlights a continued upward trend in healthcare costs.
• Transport and Communication Inflation: Inflation in the transport and communication sector saw a modest increase from 2.76% in January 2025 to 2.87% in February 2025. This slight uptick reflects rising transportation costs, possibly due to fuel price changes.

Items with the Highest and Lowest Inflation

Here’s a table summarizing the highest and lowest inflation items:

Industrial Performance: IIP Growth

The Index of Industrial Production (IIP) for January 2025 shows a growth rate of 5.0%, a notable improvement from the 3.2% recorded in December 2024. This growth is attributed to the performance of key sectors:

• Mining: 4.4% growth
• Manufacturing: 5.5% growth
• Electricity: 2.4% growth

Within the manufacturing sector, 19 out of 23 industry groups saw positive growth, with standout performances from:

• Manufacture of basic metals: 6.3%
• Manufacture of coke and refined petroleum products: 8.5%
• Manufacture of electrical equipment: 21.7%

Conclusion

The data for February 2025 paints a picture of mixed economic signals. While inflation has shown signs of easing, particularly in food prices, certain sectors like health, education, and housing continue to experience upward price pressures. The industrial sector, on the other hand, is showing strong growth, particularly in manufacturing.

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