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Data from the National Statistical Office unveiled that the consumer price index (CPI) based retail inflation surged to 5.69 per cent in December, up from 5.55 per cent in November. This spike was attributed to a notable rise in food prices, with food inflation peaking at 9.53 per cent for the same period.
Crucially, the inflation rate has stayed within the RBI’s tolerance band of 2-6 per cent. The latest data also revealed a sequential contraction of (-)0.32 per cent in the inflation rate.
Breaking down the inflation rates, rural and urban areas experienced 5.93 per cent and 5.46 per cent, respectively, marking an increase from the previous year.
Vegetable inflation saw a significant surge, rising to 27.64 percent in December from 17.7 per cent in November, while fuel and light inflation contracted by (-)0.99 per cent, compared to (-)0.77 per cent in the previous month.
In the December policy meeting, the RBI maintained the inflation target at 5.4 per cent. In August, the RBI MPC had revised the FY24 inflation forecast to 5.4 per cent from the initial 5.1 per cent.
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