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Retail inflation based on Consumer Price Index (CPI) inched up to a 4-month high of 5.69 per cent in December 2023, mainly on account of higher food prices. The CPI was at 5.55 per cent in November 2023 and 5.72 per cent in December 2022. In August 2023, inflation touched a high of 6.83 per cent. The December inflation remains within the Reserve Bank of India’s (RBI’s) comfort zone The RBI has been tasked by the government to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.

The National Statistical Office (NSO) under Ministry of Statistics and Programme Implementation in its data has showed that Rural CPI (General) in December 2023 stood at 5.93 per cent as against 5.85 per cent in November. The Urban CPI (General) stood at 5.46 per cent in December as against 5.26 per cent in November. The index value for Rural, Urban and Combined CPI (General) stood at 187.6, 183.6 and 185.7 respectively, in December 2023.

Retail inflation in the food basket was at 9.53 per cent in December 2023, up from 8.70 per cent in the preceding month and 4.19 per cent in the year-ago month. Within the food basket, inflation picked up in pulses to 20.73% in December from 20.23% from November, for vegetables it jumped to 27.6% in December from 17.70% in November, fruits it stood at 11.14% in December from 10.95% in November, and sugar to 7.14% from 6.55%, while it was just fractionally lower for cereals at 9.93% in December from 10.27% in November also for spices at came down to 19.69% in December from 21.55% in November. 

Inflation continued to ease M-o-M basis in the case of milk (to 5.07% from 5.75%), meat and fish (to 1.15% from 2.15%) and egg (to 4.36% from 5.90%). Fuel and light prices fell 0.99% year-on-year, compared to a 0.77% dip in November. Transport and communication prices rose 1.96%, slightly below November levels of 2.09%, while inflation in personal care and effects stood at 7.28% in December.