Inflation cools to one-year low of 5.7% in December

Inflation cools to one-year low of 5.7% in December: In December 2022, retail inflation declined to a one-year low of 5.72 percent, primarily as a result of falling food costs. According to information made public by the Ministry of Statistics & Programme Implementation (MoSPI), it was also comfortably inside the Reserve Bank of India’s (RBI) comfort range of 2 percent to 6 percent for a second month. The Consumer Price Index (CPI)-based inflation rate eased to 5.72 per cent in December. It was 5.88 per cent in November, and 6.77 per cent in October 2022.

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Breached RBI’s Tolerance Limit:

After remaining above the Reserve Bank of India’s upper tolerance threshold of 6 per cent since January 2022, retail inflation declined in November to 5.88 per cent and further in December to 5.72 per cent — its lowest level in one year.

Inflation Rate for Foods:

The marginal dip in inflation was driven by lower food prices, especially vegetables. It should be mentioned that the rate of food inflation for December was 4.1% as opposed to 4.67% in November. The inflation rate for vegetables saw the biggest contraction at 15.08 per cent. Inflation rate for fuel and light, however, increased mildly to 10.97 per cent against 10.62 per cent in November.

Other items which also recorded a decrease in prices include meat and fish, oil and fats, fruits, and sugar and confectionery. However, high cereal prices and an elevated core inflation (non- food, non-oil) remain a cause of worry.