India inflation rises to 1.33% in December amid higher food prices
A shop owner arranges Santa Claus decorative items on display at a market ahead of Christmas celebrations in Srinagar, Jammu and Kashmir, on December 9, 2025. (Photo: Firdous Nazir/NurPhoto via Getty Images)
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India’s consumer inflation accelerated to 1.33% in December, accelerating from 0.71% in the previous month.
The headline inflation figure fell short of economists’ expectations for a 1.5% increase in the consumer price index, according to a Reuters poll.
increase Headline inflation and rising food prices are mainly due to “increase in inflation in personal care and goods, vegetables, meat and fish, eggs, spices, pulses and produce”, India’s Ministry of Statistics and Program Implementation said on Monday.
In December, headline inflation increased by 0.76% in rural areas and 2.03% in urban areas. However, the fuel and mild inflation rate fell to 1.97%, below the pressure of 2.32% in November.
The Reserve Bank of India expects consumer inflation to be 2% for the fiscal year ending March 2026, down from October’s forecast of 2.6%. The central bank has forecast inflation will be 2.9% for the three months to March, rising to 4.0% for the quarter ending September 2026.
Record low inflation in 2025 has slowed nominal GDP growth, raising concerns among policymakers and investors.
India last week released an early forecast predicting real GDP growth for fiscal 2026 to be 7.4%, while nominal GDP growth to be 8.0%. this was that sharply It is below the 10.1% nominal GDP growth forecast in the Union Budget for the same year.
“The slowdown in the nominal GDP growth rate is a cause for concern,” said Rana Gupta, managing director of Indian Equities at Manulife Investment Management. It added that earnings growth has slowed to 9-10% from 12-13% in fiscal 2026.
He expects nominal GDP growth to rise to 10-11% in fiscal 2027 as inflation picks up, Gupta told CNBC’s “Inside India” on Thursday.
