Retail inflation in December inched slightly to 5.69%

Retail inflation in Dec: India’s retail inflation in December inched up to 5.69 per cent,  from 5.5 per cent in November, which was the highest in the last three months, the government data showed on Friday.  India’s retail inflation rebounded from 4.87 per cent in October to 5.55 per cent in November. However, the retail inflation in December stood at 5.72 per cent. 

Analysts and experts were expecting the retail inflation to inch up further around 6 per cent driven by elevated prices of pulses, tomatoes, and onions.

“CPI inflation for Dec-23 has been largely in line with expectations at 5.7 per cent YoY slightly higher compared to 5.6 per cent in Nov-23. This has translated to a quarterly average of 5.4 per cent for the third quarter of the fiscal as compared to the RBI forecast of 5.6 per cent for the quarter,” Suman Chowdhury, Chief Economist and Head- Research, Acuité Ratings & Research said. 

According to  Chowdhury,  retail core inflation is estimated to stand at 3.9 per cent in Dec-23, providing comfort to the central bank. Expectedly, food and beverages inflation stood high at 9.5 per cent due to the continuing firmness in the prices of pulses and cereals. 

Food Inflation

Food inflation in December rose to 9.53 per cent in Dec from 8.70 per cent in November. The food inflation was 6.61 per cent in October and 4.67 per cent in November 2022.  

In the last few months, food inflation has been a pain point for the economy. Madhavi Arora, lead economist at Emkay Global Financial Services expects December CPI to come at 5.88 per cent while core inflation, which excludes volatile items like food and fuel prices, may ease to 3.9 per cent. Reportedly, Barclays estimated that CPI inflation in December to 5.6 per cent driven higher mostly by unfavourable base effects.

On Thursday, the US consumer price index increased 3.4 per cent  in the year through December, the most in three months according to government figures. 

Rural and Urban Inflation

The rural inflation was higher than the urban retail inflation. The rural retail inflation in December at 5.93 per cent and the urban inflation stood at 5.46 per cent.