Matrix of inflation

• The final inflation print before the Union Budget for 2025-26 presents a 5.22% price rise for Indian consumers.

• This is largely due to a sequential easing in food prices, which moderated from over 9% in the previous month to 8.4% last month.

• Food inflation moderated from 29.3% to 26.6%, but remained generally high.

• Households still forked out more for their meals than a year ago, with overall inflation at 5.7% and food price rise over 9.5% in December 2023.

• Prices of some food items, including vegetables, are expected to cool further this month, but those of a few critical ingredients have started to spike, including edible oils, which rose at a 33-month high pace of 14.6% in December.

• Inflation in wholesale prices has gained pace, signalling that there is room for higher costs to be passed on to consumers for food items and manufactured products.

• The government and industry want the RBI to cut interest rates to reinvigorate consumption and fading growth impulses by looking through ‘volatile’ food inflation.