Retail inflation slowed to a four-month low of 5.22 percent in December compared to 5.48 percent in November, mainly due to easing of prices in food basket, according to government data released on Monday.
According to CPI data released by the National Statistics Office (NSO), the inflation in the food basked reduced to 8.39 percent in December. It was 9.04 percent in November and 9.53 percent in December 2023.
“The CPI (General) and food inflation in December 2024 is the lowest in the last four months,” the NSO said.
The inflation based on Consumer Price Index (CPI) was 5.48 percent in November and 5.69 percent in December 2023.
Last month, the Reserve Bank of India raised the inflation projection for the current fiscal year to 4.8 percent from 4.5 percent. It also said the lingering food price pressures are likely to keep headline inflation elevated in the December quarter.
The CPI-based headline inflation increased from an average of 3.6 percent during July-August to 5.5 percent in September and further to 6.2 percent in October 2024.
Housing inflation rate for December 2024 on a year-on-year basis stood at 2.71 percent. Corresponding inflation rate for the month of November 2024 was 2.87 percent. The housing index is compiled for urban sector only, as per an official statement.
During the month of December 2024 significant decline in inflation is observed in vegetables, pulses & products, sugar and confectionary, personal care & effects, and cereals and products etc, it added.
The latest retail inflation figure was within the Reserve Bank of India’s (RBI) medium-term target of 2-6 percent.
Food inflation, a persistent challenge, rose 8.39 percent annually in December compared to a 9.04 percent rise in the previous month, and 9.53 percent in the year-ago period. Food inflation rose by 10.87 percent in October, 9.24 percent in September, and 5.66 percent in August.
India’s retail inflation surged to a 14-month high of 6.2 percent in October, with food inflation reaching a 15-month high of 10.9 percent.
Food prices have kept inflation elevated in recent months, largely driven by a sustained surge in vegetable prices, which have risen mostly by double-digits for a year.
Rural inflation eased to 5.76 percent, compared to 9.10 percent in November, while urban inflation slowed to 4.58 percent from 8.74 percent the previous month.
RBI’s Monetary Policy Committee (MPC) in December, downgraded its growth forecast for this fiscal year to 6.6 percent from 7.2 percent, while increasing its inflation estimates to 4.8 percent from 4.5 percent for the same period, highlighting concerns over food inflation.
