Retail Inflation Falls To 5.72% In December

India's Retail Inflation, measured by Consumer Price Index (CPI) declined to 5.72 in December against 5.88% In November 2022, according to data released on Thursday by the statistics ministry. Retail inflation for the month of December stayed within the RBI's comfort range of 2-6%.

According to Nish Bhatt, Founder & CEO, Millwood Kane International, "It is a double delight as the January CPI inflation has stayed below the 6% mark for two months in a row. The fall is largely due to the softness in the vegetables and food inflation. But the core inflation is a cause of concern as it has remained above the 6% mark. The effects of rising rates have started to reflect in the overall inflation data."

The IIP on the other hand stood at a higher single digit; most components posted a growth. This set of economic data will certainly help as we approach the Union Budget and the RBI policy next month. Overall it looks like the central will be comfortable pausing after a slight hike in February given the current situation, added Nish Bhatt.

Earlier, according to Reuters January 4-9 poll of 45 economists, consumer price inflation was estimated to remain at 5.90% in December from a year earlier. It is worth noting that earlier consumer price inflation reached an 11-month low of 5.88% in November.

Meanwhile, Sakshi Gupta, HDFC Bank's chief economist told Reuters, "Although I believe that the sequential reduction in food prices would likely moderate inflation, I do not believe that it will fall significantly from the previous meeting since core inflation will continue to be sticky. And that should serve as a foundation."

It is important to note that RBI Governor Shaktikanta Das has already stressed that the central bank would continue its fight against inflation despite the worst being "behind us."