‘Old’ CPI Inflation Rises to 1.33% in December, Ends 2025 Outside RBI Target Band

• What happened: India’s retail inflation based on the Consumer Price Index (CPI) climbed to 1.33% in December 2025, up from 0.71% in November.

• Why it matters now: The inflation rate remains below the Reserve Bank of India’s 4% target band, raising questions about future monetary policy moves.

• What changes for people: Consumers continue to see moderate price growth, especially in food and essential goods, affecting household budgets.

• Who is affected: General public, policymakers, investors, and businesses tracking price stability and RBI policy.

Retail Inflation Edges Up in December, Ending Year Below RBI Target

India’s headline CPI inflation rose to 1.33% in December 2025, according to the Ministry of Statistics and Programme Implementation (MoSPI). This increase, though still below the RBI’s 4% target band, was influenced by base effects, even as food prices declined year-on-year for the seventh consecutive month.

Retail food prices fell 2.71% in December after a 3.91% drop in November, showing sustained moderation in the cost of essentials. Analysts note that while inflation is low, the RBI’s Monetary Policy Committee (MPC), set to meet February 4-6, will closely monitor trends before making policy decisions.

Economists highlight that low inflation supports consumer purchasing power but also reflects sluggish demand, signaling a delicate balance for growth and price stability heading into 2026.