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India's Inflation Hits 1.66% in December, Lowest in Years
4 Jan
Summary
- Retail inflation likely rose to 1.66% in December 2025 from 0.71% in November.
- Core inflation, excluding food and fuel, increased to 4.68% due to rising gold prices.
- RBI forecasts inflation at 2.0% for 2025-26, below its target range.
Retail inflation in India is anticipated to have climbed to 1.66% in December 2025, a notable increase from November's 0.71%. Projections indicate that strengthening food prices across various segments contributed to this rise. Despite month-on-month price gains in food items, overall food inflation is expected to remain negative, though less so than in the previous month.
Core inflation, which excludes volatile food and fuel prices, likely saw an uptick to 4.68% as gold prices resumed their upward trend. This suggests underlying price pressures in other sectors of the economy. The Reserve Bank of India (RBI) has revised its inflation forecast for the fiscal year 2025-26 downwards to 2.0%, well within its target range.
RBI Governor Sanjay Malhotra described India's current macroeconomic situation as a "rare goldilocks period," characterized by robust economic growth and remarkably low inflation. This assessment followed the central bank's decision in December 2025 to reduce the repo rate by 25 basis points to 5.25%, signaling a supportive monetary policy stance.
