According to government data released on Monday, retail inflation fell to a four-month low of 5.22 percent in December compared to 5.48 percent in November, mainly due to softening of food basket prices.
According to the CPI data released by the National Statistics Office (NSO), the inflation rate of food items decreased to 8.39 percent in December. It was 9.04 percent in November and 9.53 percent in December 2023.
“CPI (General) and food inflation in December 2024 are the lowest in the last four months,” NSO said.
Consumer Price Index (CPI) inflation was 5.48 percent in November and 5.69 percent in December 2023.
Last month, the Reserve Bank of India had raised the inflation estimate for the current financial year from 4.5 percent to 4.8 percent. It also said that prolonged food price pressures are likely to keep core inflation high in the December quarter.
CPI-based headline inflation increased from an average of 3.6 percent during July-August to 5.5 percent in September and 6.2 percent in October 2024.
On a year-on-year basis, housing inflation for December 2024 stood at 2.71 percent. The corresponding inflation rate for the month of November 2024 was 2.87 percent. According to an official statement, the housing index is designed for urban areas only.
During the month of December 2024, prices of vegetables, pulses and products, sugar and confectionery, personal care and effects, and foodgrains and products etc. have seen a significant decline in inflation.
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 year-on-year in December, compared with 9.04 percent growth in the previous month, and 9.53 percent in the year-ago period. The food inflation rate has increased by 10.87 percent in October, 9.24 percent in September and 5.66 percent in August.
India’s retail inflation hit a 14-month high of 6.2 percent in October, with food inflation hitting a 15-month high of 10.9 percent.
Food prices have kept inflation high in recent months, driven mainly by a steady rise in vegetable prices, which have risen in double digits for a year.
Rural inflation fell to 5.76 percent as against 9.10 percent in November, while urban inflation eased to 4.58 percent from 8.74 percent in the previous month.
The RBI’s Monetary Policy Committee (MPC) in December cut its growth forecast for this fiscal year to 6.6 percent from 7.2 percent, while raising its inflation forecast to 4.8 percent from 4.5 percent for the same period. , which highlighted food inflation concerns.
