
Retail inflation in india fell slightly to 5.22 per cent in december from 5.48 per cent in November. This decline was mainly due to reduction in prices of food items. A Reuters survey had estimated inflation to fall to 5.3 per cent in December. However, experts say that inflation will not reach RBI's medium-term target of 4 per cent before the second half of 2026.
Rural inflation also declined
Rural inflation stood at 5.76 per cent in december from 9.10 per cent in November. Urban inflation also came down to 4.58 per cent from 8.74 per cent in the previous month. Food inflation, which accounts for almost half of the cpi (Consumer Price Index), fell to 8.39 per cent in december from 9.04 per cent in November. Vegetable prices rose by 26.56 per cent, from 29.33 per cent in november and 42.18 per cent in October. However, the inflation rate of cereals rose to 9.67 per cent in december from 6.88 per cent in November. The inflation rate of pulses stood at 3.83 per cent, from 5.41 per cent in November. High prices of vegetables and other food items have kept inflation high in recent months.
Shaktikanta Das had already told
The RBI's Monetary Policy Committee (MPC) in december had reduced the growth rate forecast for the current financial year from 7.2 per cent to 6.6 per cent, while the inflation forecast was raised from 4.5 per cent to 4.8 per cent. Regarding the inflation outlook, in december, the then RBI governor Shaktikanta Das had said that food inflation could remain high till the third quarter of FY25 and may show signs of decline in the fourth quarter. He said, "Inflation reduces the disposable income of consumers." However, a 25 basis point cut in interest rates is expected in February. Experts believe this will be done to support the economy, as the growth rate in the July-September quarter was slightly above 5 per cent.