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India Inflation Seen Rebounding to 1.66% in December on Firmer Food Prices

The Reserve Bank has eased policy after lowering its 2025–26 inflation forecast to 2.0%.

Overview

  • Union Bank of India projects headline CPI at 1.66% for December 2025, up from 0.71% in November.
  • Food CPI is expected at -1.19% year over year versus -2.78% in November, with tomatoes showing the sharpest monthly gains based on Department of Consumer Affairs price data.
  • Core inflation is projected to have risen to about 4.68%, reflecting a renewed rally in gold prices.
  • The official December CPI release is scheduled for January 12, 2026, with figures to confirm or revise these estimates.
  • Following its December meeting, the RBI cut the repo rate by 25 basis points to 5.25% and signaled benign inflation with risks from unseasonal winter rains and potential supply disruptions.