Inflation Trends and Their Implications

Recent inflation data revealed a significant drop in CPI inflation to 3.5%, down from 7.44% just a year prior, marking a five-year low. However, this decrease is primarily attributed to the base effect, meaning that last year's exceptionally high inflation rates skewed the current figures. While energy inflation has shown improvement with an 11-month consecutive decline, particularly due to falling LPG prices, food prices continue to rise, albeit at a slower pace. As inflationary trends normalize, expectations for future inflation remain cautious, suggesting that interest rates may not change immediately.