New Inflation Series by the National Statistics Office
The National Statistics Office released a new inflation series aimed at updating the country's macroeconomic indicators. This release will be followed by a new GDP series and the Index of Industrial Production.
Key Changes in the New Inflation Series
- The base year has been updated to 2024, with the basket of items and their weights based on the Household Consumption Expenditure Survey 2023-24.
- Significant changes in household consumption patterns have been noted, with reduced expenditure on food and increased discretionary spending.
- The weight of the food and beverages category has decreased from 45.86% to 36.75%.
- Volatility in food prices previously influenced headline inflation significantly. For example, consumer food price index figures varied widely between July 2024 and November 2025.
Introduction of New Items
- New items in the consumption basket include rural housing, online media services, babysitters, and exercise equipment.
Inflation Figures and Monetary Policy Implications
- Inflation, as per the new series, was recorded at 2.75% in January, below the central bank's target of 4%.
- Price pressures were mostly muted except for segments like personal care and miscellaneous goods.
- The update in price indices will significantly impact monetary policy, particularly the RBI's inflation targeting framework.
- Members of the Monetary Policy Committee may now focus more on non-food goods and services when determining interest rates.
By accurately reflecting economic changes, these new series are expected to enhance policy responses.
