New Delhi [India], January 4: Retail inflation in India is projected to have inched up to 1.66 per cent in December 2025, up from 0.71 per cent in November, driven largely by rising food prices, according to Union Bank of India estimates. The official Consumer Price Index (CPI) data for December will be released on January 12, 2026.
Despite the increase, retail inflation remains well below the 5.2 per cent recorded in December 2024. Core inflation, which excludes food and fuel, is estimated to have risen to 4.68 per cent, influenced by a rally in gold prices during the month.
Food inflation is expected to have remained negative at -1.19 per cent, improving from -2.78 per cent in November. The report noted that month-on-month food prices rose across most segments, with tomatoes seeing the largest gains due to early winter demand and disrupted supply from October rains. The report cautioned that unseasonal winter rains and supply chain disruptions could pose upside risks to food inflation in the coming months.
The Reserve Bank of India (RBI) has maintained that inflation remains under control, revising its CPI forecast for 2025-26 to 2.0 per cent, down from 2.6 per cent. Quarterly projections show CPI at 0.6 per cent in Q3, 2.9 per cent in Q4, and expected to rise to 3.9 per cent in Q1 and 4.0 per cent in Q2 of 2026-27, remaining within the RBI’s target range of 2–6 per cent.
RBI Governor Sanjay Malhotra described the current macroeconomic conditions as a “rare goldilocks period,” marked by robust growth and low inflation. The central bank cut the repo rate by 25 basis points to 5.25 per cent in its December review. Nearly 80 per cent of the CPI basket recorded inflation below 4 per cent, reflecting broad-based softening across goods and services. (ANI)
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