Is India’s inflation finally going down?

livemint.com:

Inflation in India has seen many twists and turns in the past four years, but the signs of relief are getting stronger. Both retail and wholesale inflation inched up in December 2023—to 5.69% and 0.73%, respectively—but the uptick was mainly on account of base effect. Strip that off, and retail inflation would have slid to 5.2% and wholesale prices would have recorded a 0.6% deflation, back-of-the-envelope calculations show.

(They were 5.55% and 0.26%, respectively, in November.) On a month-on-month basis, the consumer price index (CPI) declined 0.3%, with even food items seeing a 0.9% decline. The wholesale price index also fell 0.9%, driven by a 2.3% fall in food articles. For much of 2023, food prices proved sticky, but the month-on-month decline in December offers hope, despite the 9.5% year-on-year increase.

This, along with a continued decline in core inflation, which is now below the 4% mark for the first time since the outbreak of covid-19, could help calm some worries. (Core inflation excludes prices of volatile items such as food and fuel.) “With the latest inflation print, particularly considering core inflation, we have more evidence that resilient economic growth amid reasonably tight monetary conditions has not added to inflation risks," said Barclays in a report last week. Moreover, going forward, a favourable base effect and fresh arrival of crops in the market are likely to absorb some of the price pressures, keeping inflation in check.