Retail inflation at 3-month high of 1.33% in December, Pg1

Key Highlights:

• Retail inflation in India rose to 1.33% in December 2025, a three-month high.
• The Consumer Price Index (CPI) data was released by the Ministry of Statistics and Programme Implementation.
• Food and beverages saw a price contraction of 1.85% in December 2025.
• Core inflation reached a 28-month high of 4.8% in December 2025.
• RBI targets an inflation rate of 4% with a comfort band of 2%.

Detailed Insights:

• The low retail inflation is attributed to a broad-based decline in price levels across various sectors.
• The contraction in food and beverages is partially due to a high base effect from the previous year.
• Categories like meat products, oils, and fruits experienced inflation rates above 5%, contributing to upward pressure.
• Inflation in 'pan, tobacco, and intoxicants' remained stable at 2.96% in December 2025.
• The clothing and footwear category saw a slight decrease in inflation to 1.44% in December 2025.
• The housing sector experienced a decrease in inflation, reaching 2.86% in December 2025.
• The fuel and light category also saw a decrease in inflation, settling at 1.97% in December 2025.
• The rise in core inflation was primarily driven by precious metals, with core CPI excluding gold and silver remaining stable.

Key Concepts Involved:

• Retail Inflation: The change in the price of a basket of goods and services that are typically purchased by households.
• Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services.
• Core Inflation: A measure of inflation that excludes volatile items like food and energy to provide a more stable view of underlying price pressures.