India’s consumer price inflation at 5-month high of 5.93% in December

Consumer price inflation in India, based on the Consumer Price Index (CPI), rose to 5.93 per cent in December 2023 from 5.55 per cent in November, hitting a 5-month high, preliminary data released by the National Statistics Office (NSO) showed.

CPI inflation was at 6.05 per cent in December 2022.

The annual rate of inflation based on the Consumer Price Index (Base 2012=100) had been declining since July when it touched a peak of 7.44 per cent amid soaring prices of vegetables during the monsoon season. 

Inflation based on the food price index increased to 8.97 per cent in December 2023 against 8.70 per cent in November. Food prices account for nearly half of the overall consumer price index,

While the figures pose no serious challenge to policy makers, the steady rise in prices cannot be attributed to any other reason than profiteering.

Consumer price inflation for rural areas stood lower at 5.46 per cent in December 2023 against 5.58 per cent in November and 5.39 per cent in December 2022. 

Inflation rate for urban consumers stood higher at 5.69 per cent in December 2023 against 5.26 per cent in November 2023 and 5.72 per cent in December 2022.

Food price inflation for rural areas stood at 8.97 per cent in December 2023 against 8.38 per cent in November 2023 and 5.05 per cent in December 2022.

Food price inflation for urban areas stood at 10.42 per cent in December 2023 against 9.33 per cent in November and 2.80 per cent in December 2022.

While food price volatility causes a spike in inflation during the monsoon season, the current spurt in food prices raises concerns of a hardening of the overall inflation level.