Overview
- Official data show headline CPI at 1.33% year on year in December, up 62 basis points from November’s 0.71% and slightly below a 1.5% Reuters poll forecast.
- Food disinflation moderated, with the food index at about -2.79% versus -3.91% in November, driven by firmer prices for vegetables, pulses, eggs, spices, and personal care items.
- Price pressures were uneven across the country, with urban inflation at 2.03% versus 0.76% in rural areas and Kerala registering the highest state reading at 9.49%.
- Inflation has remained under the RBI’s 2–4% target band for 11 straight months, the central bank projects roughly 2% for FY26, and an HDFC Bank economist says the trough is likely past and does not expect a February rate cut.
- This December print is the final one on the 2012=100 base, with the series moving to 2024=100 next month, a methodological change that may affect historical comparability and policy assessment.