Inflation Rises To 3-month High In December 2025
The reason for the rise in consumer price inflation across the country is primarily due to higher prices of kitchen essentials, including vegetables and protein-rich items, the government data said on Monday
New Delhi: India’s headline inflation quickened in December 2025, rising a three-month high of 1.33 per cent in the last month of the year. However, it remained below the Reserve Bank of India’s target range of 2-6 percent for the fourth consecutive month, leaving ample room for the central bank to cut interest rates at its February meeting.
The reason for the rise in consumer price inflation across the country is primarily due to higher prices of kitchen essentials, including vegetables and protein-rich items, the government data said on Monday.
As per data released by National Statistics Office (NSO), the retail inflation rose to a three-month high of 1.33 per cent in December 2025. “The inflation was at 0.71 per cent in November and the previous high was 1.44 per cent in September,” the data showed.
The NSO data further showed that food prices, which account for nearly half of the CPI basket, fell 2.71 per cent year-on-year in December, narrowing from a 3.91 percent decline in November. “Vegetable prices declined 18.47 per cent, compared with a sharper 22.20 per cent fall a month earlier, reflecting easing deflation in the food segment,” the data showed.
“The increase in headline inflation and food inflation during the month of December, 2025 is mainly attributed to increase in inflation of personal care and effects, vegetables, meat and fish, egg, spices and pulses and products,” the NSO said.
Radhika Rao, executive director and senior economist at DBS Bank said that India’s inflation bounced off lows as favourable base effects diminished, and precious metals firmed up, while food disinflation persisted. “While off its back, the still benign headline number points to slack in the economy, which allows the central bank the room to retain its accommodative bent on policy. We expect the RBI to retain its inflation-targeting framework and parameters at the upcoming review,” Rao said.
“The CPI inflation expectedly rose to 1.3 per cent in December 2025 from 0.7 per cent in November 2025, while printing marginally lower than ICRA's estimate of 1.4 per cent for the month. The uptick was driven by narrower deflation in the food and beverages segment as well as hardening inflation in the miscellaneous items,” said Aditi Nayar, chief economist and head (research & outreach), ICRA Ltd.
“Looking ahead, ICRA expects the F&B segment to revert to inflation in January 2026 after printing in the deflationary territory in six of the last seven months. This will push the headline CPI inflation reading above the 2.0 per cent mark after a gap of four months, coming back above the lower end of the MPC’s medium term target range of 2-6 per cent,” she said.
