Retail inflation rose at the fastest pace in four months in December 2023 at 5.69 per cent, on account of an increase in prices of vegetables, pulses, and spices, according to government data released on Friday.
The annual inflation based on Consumer Price Index (CPI) was at 5.55 per cent in November and 5.72 per cent in the year-ago month.
As per the data released by the National Statistical Office (NSO), the rate of price rise in the food basket, which constitutes nearly half of the CPI, increased to 9.53 per cent in December 2023, as against 8.7 per cent in the preceding month, and 4.19 per cent in December 2022.
In August 2023, inflation had touched a high of 6.83 per cent.
The latest data showed that inflation in the vegetable segment was at 27.64 per cent on an annual basis, followed by ‘pulses and products’ at 20.73 per cent, and spices at 19.69 per cent.
However, prices of ‘oil and fats’ declined by 14.96 per cent.
The retail inflation was higher in rural areas at 5.93 per cent in December, while it was 5.46 per cent in urban India.
However, the inflation in the food basket was lower in rural areas compared to urban centres.
Commenting on the data, Aditi Nayar, Chief Economist, ICRA said the sequential uptick in the headline CPI inflation in December 2023 was entirely led by the food and beverages segment, with all the other sub-groups either reporting an easing or similar year-on-year prints compared to the previous month.
“Within the food segment, vegetables were expectedly the main culprit, even as seven of the 12 sub-segments witnessed a moderation in their year-on-year inflation print in the month,” she said.
The Reserve Bank of India has been tasked by the government to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.
According to the NSO data, the lowest inflation was witnessed in Delhi at 2.95 per cent, and the highest in Odisha at 8.73 per cent.
