Dec inflation at 1-yr low

The latest data released by the government shows that the inflation rate in December has hit a one-year low. This is good news for consumers who have been struggling with high prices for the past few months.

The Consumer Price Index (CPI) for December 2021 was recorded at 4.59%, which is the lowest it has been since December 2020. This is a significant drop from the 6.93% inflation rate recorded in November 2021.

The main reason for the drop in inflation is the decrease in food prices. Food inflation, which has been a major contributor to the overall inflation rate, fell to 3.41% in December from 9.02% in November. This is due to the easing of supply chain disruptions caused by the pandemic and the good monsoon season.

The drop in inflation is also good news for the Reserve Bank of India (RBI), which has been struggling to control inflation for the past few months. The RBI has been raising interest rates to control inflation, which has led to higher borrowing costs for consumers and businesses.

The drop in inflation is expected to ease the pressure on the RBI to raise interest rates further. This will be a relief for borrowers who have been struggling with high interest rates.

However, economists warn that the drop in inflation may be temporary. The rise in crude oil prices and the possibility of a third wave of the pandemic could lead to higher inflation in the coming months.

In conclusion, the drop in inflation in December is good news for consumers and the RBI. However, it is important to keep an eye on the factors that could lead to higher inflation in the future.