India's Retail Inflation Hits 3-Month High in December; RBI Rate Cut Debated

• India's retail inflation rose to a three-month high of 1.33% in December, up from 0.7% in November.
• Despite the rise, headline inflation remains below RBI's 2% tolerance threshold for four consecutive months.
• Food deflation continued for the seventh month, with cereals entering deflation for the first time in 51 months.
• Core inflation (excluding F&B, F&L, petrol, diesel) jumped to a 28-month high of 4.8% in December, largely due to precious metals.
• Economists are split on a potential 25 bps RBI rate cut in February, with some advocating for a pause until new CPI and GDP series are released.

Why It Matters: Retail inflation in India rose in December, but economists are divided on an RBI rate cut amidst new data series.