India’s retail inflation eased to a multi-month low of 1.33 percent in December, marking a welcome relief for consumers amid steady economic recovery signals. The Consumer Price Index (CPI) data released by the government on Monday highlights a continued downward trajectory from November’s 1.67 percent rate.
What stands out most is the food inflation story. For the seventh consecutive month, food prices remained in negative territory at -1.53 percent, driven primarily by sharp declines in vegetables, pulses, and fruits. Vegetable prices, in particular, plummeted 16.85 percent year-on-year, reflecting abundant harvests and improved supply chains post-monsoon.
Fuel and light inflation moderated to 0.21 percent, while housing costs rose modestly by 2.87 percent. Rural inflation stood at 1.01 percent, slightly lower than urban areas at 1.83 percent, indicating varied pressures across regions.
Economists view this as a positive development for the Reserve Bank of India (RBI), which has been navigating rate cuts amid global uncertainties. ‘This sub-2 percent print gives the MPC more room to support growth without inflation fears,’ noted a leading analyst.
Looking ahead, experts predict inflation could hover around 1-2 percent in early 2024, barring any major supply shocks from weather or geopolitics. The trend underscores India’s resilient agricultural output and effective monetary policy in taming price pressures.