New Delhi: Retail inflation dropped to a one-year low of 5.72 % in December 2022, primarily as a result of falling food costs,  official figures issued on Thursday.

Retail inflation measured using the Consumer Price Index (CPI) was 5.88% in November 2022 and 5.66% in December 2021. According to National Statistical Office (NSO) figures, food basket inflation was 4.19 % in December as opposed to 4.67% in November.

Retail inflation dropped to 5.88 % in November and then further in December to reach 5.72 %, which is its lowest level in a year, after rising above the Reserve Bank of India's upper tolerance threshold of 6 % since January 2022.

However, spices became dearer by nearly 20% and cereals by about 14 %. The index of 'fuel and light' was up by about 11% on annual basis in December. As per the flexible inflation targeting (FIT) regime, the RBI has to ensure the retail inflation (CPI) at 4% with a margin of 2% on either side.

The RBI had to submit a report to the central government as it failed to keep the inflation below 6 % for three consecutive quarters since January 2021.

Governor-headed MPC which decides on policy rates is scheduled for February 6-8.

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