retail inflation
There is news of relief on the inflation front. Retail inflation declined from 5.5 percent in November to 5.22 percent in December. According to government data released on Monday, retail inflation fell to a four-month low of 5.22 per cent in December, compared to 5.48 per cent in November. The main reason for this is the softening of prices of food items. Inflation based on the Consumer Price Index (CPI) stood at 5.48 percent in November and 5.69 percent in December 2023. According to the CPI data released by the National Statistical Office (NSO), food inflation declined to 8.39 per cent in December. It was 9.04 percent in November and 9.53 percent in December 2023. NSO said CPI (general) and food inflation in December 2024 are the lowest in the last four months.
RBI had increased the estimate
Last month, the Reserve Bank of India raised the inflation forecast for the current fiscal year to 4.8 percent from 4.5 percent. It also said core inflation is likely to remain elevated in the December quarter due to food price pressures. CPI-based headline inflation rose from an average of 3.6 per cent during July-August to 5.5 per cent in September and 6.2 per cent in October 2024.
Loan may become cheaper in February
Due to decline in retail inflation, RBI may announce repo rate cut in the monetary policy meeting to be held in February. There has been a demand for reduction in repo rate for a long time. However, due to high inflation, this decision is stuck, now it is expected that the loan may become cheaper in February.
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