Inflation eases in February, but one-fifth of items still record steep price rises

Subscribe to enjoy similar stories. Inflation may have finally eased to below 4.0% in February, thanks to a continued correction in vegetable items, but high inflation in several items may continue to pinch consumers. A Mint analysis of item-wise inflation shows that despite the headline inflation easing to 3.61% in February, over one-fifth of the items in the basket still recorded inflation above 6%.

Inflation has eased for four consecutive months now as food prices, particularly those of vegetables, corrected in recent months. The sharper-than-expected easing (Mint poll pegged it at 3.9%) in February can be attributed to the first deflation for vegetables since June 2023. After touching a recent high of 42.23% in October 2024, vegetables recorded -1.07% in February, in line with seasonal correction in prices on arrival of new crops in the market.

While the number of items recording more than 6% inflation has also come down, 20% of the basket is still recording high inflation, with coconut oil recording as much as 54.48% inflation and gold 35.56%. “While overall disinflation is evident, core inflation (excluding food & fuel) edged up to 4%, suggesting persistent price pressures in certain segments. The biggest driver here was gold prices," said Arsh Mogre, an economist at Institutional Equities, PL Capital (Prabhudas Lilladher).

Among the items, which had over 0.5% weightage in the basket, gold topped the list in February. Interestingly, despite the overall vegetable recording deflation, potato and onion recorded double-digit inflation in February. The effect of custom duty hike on edible oils was also visible, with these items also recording double-digit inflation.