India’s retail inflation drops to 4-month low at 5.22% for December: Govt data

Retail inflation eased to a four-month low of 5.22 per cent in December, as compared to 5.48 per cent in November, according to government data released on Monday (January 14).

This ease in inflation is due to a reduction in food prices.

As per the Consumer Price Index (CPI) data released by the National Statistics Office (NSO), inflation in the food basket fell to 8.39 per cent in December, down from 9.04 per cent in November and 9.53 per cent in December 2023.

“The CPI (General) and food inflation in December 2024 are the lowest in the last four months," the NSO said.

The CPI-based inflation increased from an average of 3.6 per cent in July-August to 5.5 per cent in September, and then to 6.2 per cent in October 2024.

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The housing inflation rate saw a slight decline. For December 2024, it was 2.71% as compared to 2.87% in November 2024, according to government data.

RBI revises inflation projection

Last month, the Reserve Bank of India revised its inflation projection for the current fiscal year to 4.8% from 4.5%.

India’s central bank emphasised that persistent food price pressures are likely to keep headline inflation elevated in the December quarter.

RBI’s Policy rates unchanged due to high inflation

Due to high inflation, the Reserve Bank of India has kept the repo and reverse repo rates unchanged. At its December meeting, the RBI maintained the policy rate at 6.5 per cent for the eleventh consecutive time.

The Monetary Policy Committee will take a call on monetary policy and rates at the February meeting, after the budget.

With inputs from agencies.