India's WPI inflation rises to 2.37% in December; retail inflation eases to four-month low

In contrast, WPI inflation was significantly lower at 0.86% in December last year.

Inflation in food items, however, saw a slight dip to 8.47% in December from 8.63% in November.

The deceleration was attributed to lower price increases in cereals (6.82%), paddy (6.93%), wheat (7.63%), and pulses (5.02%), as per data from the Union Ministry of Commerce and Industry.

Conversely, the prices of vegetables (28.65%), potatoes (93.2%), fruits (11.16%), milk (2.26%), and meat (5.43%) experienced an upward trend during the month.

The fuel and power category remained in deflation, with prices contracting by 3.79% in December.

In the manufactured products segment, which accounts for 64.2% of the WPI basket, inflation edged up to 2.14% in December from 2% in November.

Retail inflation trends

India’s retail inflation, measured by the consumer price index (CPI), dropped to a four-month low of 5.22% in December from 5.48% in November, primarily due to moderating food inflation.

Last month, the Reserve Bank of India (RBI) maintained its benchmark interest rate, or repo rate, at 6.5% for the 11th consecutive time, adopting a neutral monetary policy stance. The RBI primarily factors in retail inflation when framing its policy decisions.