Retail Inflation in India: Is inflation rearing its head again? Retail inflation rebounded in December from November

• Inflation doubled in December compared to November
• The common man is shocked by the marginal inflation
• The shock of inflation came from the kitchen

Retail Inflation in India: The government’s economic statistics of the country (Retail Inflation) has been announced which shows an increase in retail inflation. According to the latest data released by the government, the retail inflation rate rose to 1.33 percent in December. This figure represents an increase compared to the previous month i.e. November. An analysis of the data released shows that the retail inflation rate was 0.71 percent in November. A rise of 1.33 percent in December shows a significant increase on month-on-month basis. Although this rate still appears to be within a manageable range, this percentage change in a month indicates an increase in prices or a change in the base effect. Inflation data released by the government is important for policymakers and market analysts, as the rate of inflation directly affects the purchasing power of the common man and the monetary policy of the Reserve Bank.

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This increase from 0.71 percent to 1.33 percent can be a key indicator to understand the direction of price index in future. Retail inflation data for December showed that retail prices have shown a slightly firmer trend after a period of slowdown. Although this data is currently limited, the level of 1.33 percent is sufficient to indicate that the demand and supply dynamics in the economy are changing.

Retail inflation has remained below the Reserve Bank’s lower tolerance limit (2%) for the fourth consecutive month. Central Government to RBI (RBI) aims to keep inflation within 4% (2%). Current data suggest that inflation is currently under control, but the recent uptick shows the need for policymakers to be cautious.

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According to the National Statistics Office, the increase in core inflation and food inflation in December 2025 was mainly due to increase in prices of personal care and effects, vegetables, meat and fish, eggs, spices, pulses and their products. It is worth noting that the government has directed the RBI to set an inflation target of 4 percent, with a margin of 2 percent on either side.