India's annual rate of inflation based on the Wholesale Price Index (WPI) fell for the seventh straight month in December.
Wholesale price inflation declined from a peak of 15.88% in May 2022 to 4.95% in December 2022. WPI inflation stood at 5.85% in November 2022 and 14.27% in December 2021.
Decline in the rate of inflation in December 2022 is primarily contributed by fall in prices of food articles, mineral oils, crude petroleum & natural gas, food products, textiles and chemicals & chemical products, according to the Ministry of Commerce & Industry.
In the fuel and power basket, inflation rose to 18.09% year-on-year in December as against 17.35% in November. For manufactured products, WPI inflation declined to 3.37% in December from 3.59% in November.
Inflation in primary articles fell to 2.38% in December compared with 5.52% in November. Inflation for food articles eased to 0.65% in December from 2.17% in November.
This comes days after India's retail inflation, measured in Consumer Price Index (CPI), declined to a one-year low of 5.72% in December 2022 from 5.88% in November 2022, staying below the Reserve Bank's upper threshold of 6% for the second month in a row.
While urban inflation in December 2022 declined to 5.39% from 5.68 in November 2022 and 5.90% in the year-ago period, rural inflation remained higher at 6.05%, dipping marginally to 6.09% in November 2022 and up from 5.36% in the year-ago period, the data released by the Ministry of Statistics & Programme Implementation showed.
The Reserve Bank of India (RBI) last month kept the inflation target for the current financial year 2022-23 unchanged at 6.7%, while cautioning that the battle against inflation is yet not over.
RBI governor Shaktikanta Das, who heads the six-member Monetary Policy Committee (MPC), said the central bank will keep "Arjuna's eye" on evolving inflation dynamics as core inflation (CPI excluding food and fuel) remained sticky and exposed to global factors.
"Going forward, food inflation is likely to moderate with the usual winter softening and the likelihood of a bountiful rabi harvest, but pressure points remain in the form of prices of cereals, milk and spices in the near term. The main risk is that core inflation (CPI excluding food and fuel) remains sticky and elevated." He said overall, the CPI price momentum remains high. "Risks from adverse weather events add to uncertainty in the outlook," Das had said last month.