Retail inflation slowed to a four-month low of 5.22 percent in December compared with 5.48 percent in November, mainly due to lower prices of the food basket, according to government data published on Monday.

According to CPI data released by the National Statistics Office (NSO), food inflation eased to 8.39 percent in December. It was 9.04% in November and 9.53% in December 2023.

“CPI (headline) and food inflation in December 2024 is the lowest in four months,” the NSO said.

Inflation based on the Consumer Price Index (CPI) was 5.48 percent in November and 5.69 percent in December 2023.

Last month, the Reserve Bank of India raised its inflation projection for the current fiscal year to 4.8% from 4.5%. It also said persistent food price pressures are likely to keep headline inflation high in the December quarter.

Headline CPI inflation rose from an average of 3.6% in July to August to 5.5% in September and to 6.2% in October 2024.

The housing inflation rate in December 2024 year-on-year stood at 2.71 percent. The corresponding inflation rate for the month of November 2024 was 2.87 percent. The housing index is compiled only for the urban sector, according to an official statement.

During the month of December 2024, a significant decrease in inflation is observed in vegetables, legumes and products, sugar and confectionery, care and personal effects, cereals and products, etc.

The latest retail inflation figure was within the Reserve Bank of India’s (RBI) medium-term target of 2-6 percent.

Food inflation, a persistent challenge, rose 8.39 percent year-on-year in December compared with a rise of 9.04 percent in the previous month and 9.53 percent in the year-ago period. Food inflation rose 10.87% in October, 9.24% in September and 5.66% in August.

India’s retail inflation rose to a 14-month high of 6.2% in October, and food inflation hit a 15-month high of 10.9%.

Food prices have kept inflation high in recent months, largely driven by a sustained rise in vegetable prices, which have mostly risen by double digits for a year.

Rural inflation eased to 5.76%, compared to 9.10% in November, while urban inflation slowed to 4.58% from 8.74% in the previous month.

RBI’s Monetary Policy Committee (MPC) in December downgraded its growth forecast for this financial year to 6.6% from 7.2%, while raising its inflation estimates to 4.8 % from 4.5% in the same period, highlighting concerns about food inflation.