Consumer prices in India rose at a meager 1.33 percent pace in December, the slowest in over four years excluding exceptional periods, fresh data shows. This deceleration from November’s 1.67 percent offers respite amid high growth expectations for FY24.
Driving the narrative is food deflation’s endurance at -1.53 percent, now in its seventh month. Vegetables crashed 16.85 percent, pulses fell 2.28 percent, and oils & fats declined 3.21 percent. Such trends stem from record kharif outputs and efficient logistics.
Elsewhere, housing inflation ticked up to 2.87 percent, education climbed 4.10 percent, but fuel eased to 0.21 percent. Rural inflation trailed urban at 1.01 percent to 1.83 percent, highlighting agrarian benefits.
RBI watchers see this as validation for recent 250 basis points rate cuts. ‘Low and stable inflation anchors expectations, aiding transmission,’ opined a former central banker. Equity markets shrugged off the release, focusing on Q3 earnings.
Projections suggest CPI averaging 4.5 percent for FY25, with upside risks from proteins and potential El Niño effects. Yet, December’s benign reading underscores policy efficacy in balancing growth and stability, positioning India favorably among emerging peers.