According to government data released on Thursday, India’s annual retail inflation decreased to 5.72 percent in December from 5.88 percent the month before. Inflation decreased by 0.4% between November and December 2022, compared to a reduction of 0.1% between October and November 2022.
India’s retail inflation eases to 5.72% in December from 5.88 % in previous month
The most recent inflation data contradicts predictions by international business trackers that India’s annual inflation would reach 5.90% in December 2022. The data pertains to the month in which India’s central bank, in an effort to control inflation, raised interest rates by 35 basis points to 6.25 percent on December 7.
Government mandates RBI to sustain inflation at 4%
The RBI has been ordered by the government to maintain retail inflation at 4%, with a 2% tolerance on each side. The decline in food prices due to the drop in vegetable prices helped to keep inflation within the acceptable range.
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The inflation rate has remained within the Reserve Bank of India’s 2–6% “tolerance zone.” Compared to the 0.11 percent reduction experienced in October-November 2022, the inflation rate in December 2022 decreased by 0.4%.
The Reserve Bank of India’s inflation rate is within its “tolerance band”
India’s inflation rate falls for a second month in a row
According to reports, falling food prices are to blame for the lowering inflation rate. The CPI for India is about 40% accounted for by food prices (Consumer Price Index).
Declining to 4.19 percent in December was food inflation. It was reported to be 4.67 percent in November.
At the Monetary Policy Committee (MPC) meeting in December, the Reserve Bank of India (RBI) kept its FY23 inflation prediction of 6.7%.
“We will maintain an Arjuna’s eye on inflation and we will be ready to act,” RBI Governor Shaktikanta Das had stated. “We are highly alert of emerging inflation dynamics and look at data virtually every day.”
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