India's headline retail inflation rate accelerated to a four-month high of 5.69 percent in December, according to data released by the Ministry of Statistics and Programme Implementation on January 12, thanks to an unfavourable base effect.
The Consumer Price Index (CPI) inflation print in November was 5.55 percent.
At 5.69 percent, the latest CPI inflation figure is below expectations, with economists having predicted prices likely rose 5.9 percent year-on-year in December.
While headline retail inflation rose again in December - it has now spent 51 consecutive months above the Reserve Bank of India's (RBI) medium-term target of 4 percent - it has undershot forecasts for the second month running, ensuring that it has been lower than the Indian central bank's forecast of 5.6 percent for October-December.
An unfavourable base effect was the key driver of inflation in December, although the price momentum - indicated by the month-on-month change in prices - weakened. The Consumer Food Price Index, for instance, was down 0.9 percent month-on-month (MoM), aided by a 5.3 percent sequential fall in the price index for vegetables as prices continued to correct.
The slowdown in price momentum was visible in categories apart from food too, with the price index for housing - which makes up 10 percent of the consumption basket - contracting by 0.6 percent MoM in December. The other categories - clothing and footwear, fuel and light, and miscellaneous items - all saw their price indices rise by just 0.2 percent from November.
(With inputs from agencies)