India’s retail inflation eases to 4-month low of 5.22% in December 2024

Rural inflation stood at 5.76%, while urban inflation was lower at 4.58% in December.

The inflation rate has been gradually decreasing since peaking in October 2024, the highest in more than a year since September 2023.

"The CPI (General) and food inflation in December, 2024 is the lowest in last four months," a government release noted.

The Consumer Food Price Index (CFPI), which tracks changes in food prices, fell to 8.39% in December from 9.04% in November and 10.87% in October. Rural food inflation stood at 8.65%, while urban food inflation was recorded at 7.90% in December.

Housing inflation, calculated only for urban areas, eased slightly to 2.71% in December compared to 2.87% in November and 2.81% in October. The housing index has shown relative stability in recent months.

December witnessed a significant decline in inflation for vegetables, pulses and products, sugar and confectionery, cereals, and personal care items.

Peas (89.12%), potatoes (68.23%), garlic (58.17%), coconut oil (45.41%), and cauliflower (39.42%) were among the top five items with the highest year-on-year in December 2024.

On the other hand, items like jeera (-34.69%), ginger (-22.93%), dry chillies (-10.32%), and LPG (-9.29%) experienced significant deflation.

Inflation for both CPI (General) and CFPI had been declining from December 2023 through mid-2024, with CPI (General) reaching its lowest point in July. However, inflation picked up in the latter half of the year before easing again in November.

Last month, the Reserve Bank of India raised the inflation projection for the current fiscal year to 4.8% from 4.5%. It also said the lingering food price pressures are likely to keep headline inflation elevated in the December quarter.