Dec Retail Inflation Eases to 4-Month Low, Boosts Rate Cut Hopes

India's annual retail inflation in December eased to a four-month low, government data showed on Monday, boosting hopes of the country's central bank cutting interest rates in February.

- Reuters

NEW DELHI:

Annual retail inflation in December eased to 5.22% from 5.48% in the previous month, lower than economists' estimate of 5.3% in a Reuters poll.

"Fall in headline inflation boosts February rate cut odds," said Harry Chambers, economist at Capital Economics. "We are forecasting a 25 basis points cut to the repo rate, to 6.25%," Chambers said.

Inflation in food items, which account for nearly half of the consumption basket, slowed to 8.39% in December from 9.04% a month earlier.

Prices of cereals rose by 6.5% from a 6.88% increase in November, while those of pulses rose 3.83% compared to a 5.41% growth in the same period.