In February 2025, India’s retail inflation rate fell to a seven-month low of 3.61%, primarily due to declining prices of vegetables and other essential commodities. This decrease has sparked discussions about potential interest rate cuts by the Reserve Bank of India (RBI) in its upcoming policy meetings.
However, Kerala presents a contrasting scenario. In January 2025, the state recorded the highest retail inflation rate in India at 6.76%, significantly above the national average. This surge is largely attributed to escalating food prices, with food inflation in Kerala reaching 9.9% compared to the national average of 5.68%.
The impact is more pronounced in rural areas of Kerala, where inflation stood at 7.31%, surpassing the urban rate of 5.81%. This disparity underscores the financial strain on rural households, particularly concerning essential expenses like food, education, and healthcare.
Several factors contribute to Kerala’s elevated inflation. The state’s dependence on imports for various commodities makes it susceptible to price fluctuations. Additionally, unique consumption patterns and higher wages may exert upward pressure on prices.
The persistent high inflation in Kerala poses challenges for policymakers, especially when national trends suggest easing inflationary pressures. Addressing these regional disparities is crucial for ensuring balanced economic growth and safeguarding the purchasing power of residents.
