India’s December 2025 CPI headline inflation rose to 1.33%, up from 0.71% in November, as the deceleration in food prices moderated.

Food inflation (CFPI) remained negative at -2.71% year-on-year in December 2025, marking the seventh consecutive month of negative food inflation.

Annual inflation readings show December 2025 CPI at 1.33% with November at 0.71%, while September 2025 stood higher at about 1.44%; December 2024 was 5.22%.

The report is based on a Reuters poll conducted January 5–8 and notes disclaimers from the source about syndication and accuracy.

Policymakers will weigh whether inflation is durably aligned with the 4% target rather than relying solely on the headline number when deciding policy moves.

RBI Governor described the macro backdrop as a rare goldilocks period of high growth and very low inflation.

The RBI policy outlook suggests a pause in rate cuts or a hold, as inflation remains below the lower end of the target band, though risks from oil, commodities, weather, and geopolitics could shape moves.

The broader context includes ongoing inflation dynamics, RBI considerations, and impacts on growth forecasts for fiscal year 2026 and beyond.

Markets and experts cautioned that nominal GDP growth could slow before a potential rebound in 2027 as inflation trends evolve.

Early GDP outlook pointed to real GDP growth around 7.4% for fiscal year 2026, with nominal growth about 8.0%, below the Union Budget’s 10.1% nominal growth forecast.

The article is drawn from a Reuters poll conducted in early January, consulting economists from various institutions.

The government has instructed the RBI to target inflation around 4% with a ±2 percentage point tolerance band.