India's Retail Inflation Hits Three-Month High of 1.33% in December 2025
India's retail inflation, measured by the Consumer Price Index (CPI), rose to a three-month high of 1.33% in December 2025. Despite the slight uptick, it remains significantly below the Reserve Bank of India's (RBI) lower comfort level of 2%. The low figure is attributed to a broad-based decline in price levels across various sectors. However, core inflation, which excludes volatile components like food and fuel, jumped to a 28-month high of 4.8%. While food and beverage prices saw a contraction, meat, oils, and fruits remained high, potentially exerting upward pressure in the coming months.
Key Points
- Retail inflation reached 1.33% in December 2025, up from previous months but still below the RBI's 2% lower threshold.
- The RBI targets an inflation rate of 4%, with a comfort band of 2% above and below that target (2% to 6%).
- Core inflation, which excludes food, beverages, fuel, light, and transport fuels, rose significantly to 4.8%.
- The housing sector and fuel/light categories saw an easing of inflation compared to the previous month.
Exam Facts
- Retail inflation rate in Dec 2025: 1.33%.
- RBI inflation target: 4% (with a +/- 2% band).
- Core inflation in Dec 2025: 4.8%.
- Index used for retail inflation: Consumer Price Index (CPI).
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