Overview
- Food prices stayed in deflation at -2.71% year-on-year, narrowing from -3.91%, as vegetables, pulses, eggs, meat and fish, spices and personal care costs firmed.
- Urban inflation picked up to 2.03% versus 0.76% in rural areas, highlighting a widening city–village gap.
- Headline inflation remained below the RBI’s 2% floor for the fourth month, and 2025’s average of about 2.2% was the lowest in 12 years.
- December’s reading is the last using the 2012=100 base; the rebased CPI (2024=100) will begin with January data due on February 12.
- Economists attribute the uptick to fading base effects and firmer food categories, with many expecting the RBI to pause further rate cuts at its Feb. 4–6 meeting.