Retail inflation for December 2022 fell to a year's low of 5.72 per cent. Thanks to a reduction in food prices, the consumer price index for December was lower than 5.88 per cent in November.
This is the second consecutive month when it has remained within the RBI's tolerance band of 2 per cent to 6 per cent.
Food inflation, which makes up 40 per cent of the consumer price index because of its importance in household expenses, went down from 4.67 per cent to 4.1 per cent. The retail inflation is also lower than estimates from economists, who had expected CPI for December to be 5.9 per cent.
Vegetable inflation contracted by more than 15 per cent, while the same for cereals was almost 14 per cent. Although the RBI had maintained its inflation forecast for FY23 at 6.7 per cent last month, the falling CPI may lead to less aggressive interest rate hikes.
