Retail inflation eases to 4-month low of 5.22% in December as food prices cool down

Retail inflation slowed to a four-month low of 5.22 percent in December from 5.48 percent in November, mainly due to weaker food basket prices, government data released on Monday showed.

According to the CPI data published by the National Statistical Service (NSS), the inflation of food products decreased to 8.39 percent in December. in November it was 9.04 percent, and in December 2023 – 9.53 percent.

“CPI (headline) and food inflation in December 2024 are the lowest in the last four months,” NSS said.

Based on the Consumer Price Index (CPI), inflation was 5.48 percent in November, and 5.69 percent in December 2023.

The Reserve Bank of India last month raised its inflation forecast for the current fiscal year from 4.5 percent to 4.8 percent.It also said lingering food price pressures were likely to keep headline inflation down in the December quarter.

Headline CPI inflation increased from an average of 3.6 percent in July-August to 5.5 percent in September and further to 6.2 percent in October 2024.

The inflation rate of apartments in December 2024 was 2.71 percent on an annual basis. The corresponding inflation in November 2024 was 2.87 percent. The housing index is compiled for the urban sector only, according to an official statement.

During the month of December 2024, a significant decline in inflation was observed in the sectors of vegetables, pulses and products, sugar and confectionery, personal care and products, grains and products, etc.

The latest retail inflation reading 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 to 9.04 percent growth in the previous month and 9.53 percent in the previous year. by 9.24 percent, in August by 5.66 percent.

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 driven up inflation in recent months, largely driven by a steady rise in vegetable prices, which have mostly risen by double digits over the year.

Rural inflation eased to 5.76 percent from 9.10 percent in November, while urban inflation slowed 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 inflation estimates to 4.8 percent from 4.5 percent in the same period, highlighting concerns over food inflation. :