India’s retail inflation dropped to a four-month low of 5.22% in December 2024, driven by a decline in food prices, according to data from the Ministry of Statistics & Programme Implementation on 13th January.

India’s retail inflation eased to a four-month low of 5.22% in December 2024, primarily due to a decline in food prices, according to the Ministry of Statistics & Programme Implementation.

Food inflation for December stood at 8.39%, slightly higher than projections but down from 9.04% in November 2024.

Rural inflation dropped to 5.76% from 5.95%, while urban inflation declined to 4.58% from 4.83% in the previous month.

Key categories showed improvement, with vegetable inflation falling to 26.56% from 29.33%, pulses inflation easing to 3.83% from 5.41%, and fuel and light inflation improving to -1.39% from -1.83%.

Housing inflation was recorded at 2.71%, slightly lower than November’s 2.87%, while clothing and footwear inflation remained stable at 2.74%.

According to an economist at ICRA, CPI inflation is expected to decline further to 4.5-4.7% in January 2025 due to a sharp drop in vegetable prices.

The Reserve Bank of India aims to maintain retail inflation at 4% with a 2% margin on either side, and CPI data is a key factor in its monetary policy decisions.

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