Retail inflation eases to 4-month low of 5.22%
India’s retail inflation rate, measured by the Consumer Price Index (CPI), declined to a four-month low of 5.22% in December as compared to 5.48 % in November, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI).
The decline in inflation is mainly attributed to softening in prices of food items such as vegetables, pulses, sugar and confectionary, personal care and effects, and cereals. Retail inflation was 6.21% in October, 5.49% in September and 3.65 % in August 2024.
Inflation for rural areas was recorded at 5.76%, while urban inflation stood lower at 4.58%.
The Consumer Food Price Index (CFPI), which measures food inflation, recorded a year-on-year increase of 8.39% for December. Rural food inflation was slightly higher at 8.65%, while urban areas experienced a rate of 7.90%. “ The moderation was largely on account of softening food inflation which declined to 8.4 % from 9% in November. Within food, we see diverging trends with inflation in cereals, pulses and vegetables softening and that in meat, egg, oil products and fruits rising,” Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Group, said.
Due to persistent high food prices and weakened consumption last month, the RBI raised its inflation forecast for the current fiscal to 4.8% from 4.5%. He added fuel continued in negative territory for the 16th consecutive month.
“With this the inflation for the quarter averaged 5.6 % in line with the RBI projection of 5.7%. With the RBI MPC meeting in February, it will also consider the Budget proposals while taking into consideration the inflationary impact,” he added.
