India's Dec CPI Accelerates to 1.33% YoY, Food Deflation Eases to -2.71% from -3.91%

Headline CPI reflects 45.86% food/beverage weightage; Dec sequential MoM gains in perishables offset by base effects. Rural-urban split: combined 1.33%, with food driving disinflation (rural ~ -2.5%, urban ~ -3.0% est.). Non-food like housing (2.7-3%), health (3.8%), education stable; transport eased on lower energy pass-through.

Key Highlights

• Headline CPI: 1.33% YoY (vs. Nov 0.71%, poll 1.5%); lowest post-pandemic avg, FY26 Q3 ~0.6%.
• ​Food Deflation: -2.71% YoY (from -3.91%), vegetables ~ -14.7%, pulses -14.9%, cereals -0.3%; narrowing after Oct -5.02% trough.
• ​Core Inflation: Ex-food/fuel ~4.53% (up from 4.2-4.3%), gold/rupee mildly firm; underlying ~2.6% ex-gold.
• ​Sector Insights: Oils/fats, fruits, eggs contribute negativity; housing 2.71%, transport 0.94% post-GST cuts.
• ​Policy Outlook: Sub-2% opens Feb cut; RBI FY26 proj ~2.6%; agri output, imports sustain softness.

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Benign trends aid growth revival.
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Sources: Economic Times, Trading Economics, Reuters, MOSPI
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