Retail Inflation and Consumer Price Index (CPI) Update
Overview of December 2025 CPI Data
The retail inflation for December 2025 was recorded at 1.33%, marking a three-month high, yet being the third lowest since the current CPI series began.
In the period of April to December 2025, the average inflation rate was 1.7%, significantly lower than the 4.9% average during the same period in 2024.
Discrepancy in Inflation Perception
- The official data shows significantly lower inflation than what is perceived by the public.
- According to the Reserve Bank of India’s survey, households perceived inflation to be at 6.6%.
- Households expect inflation to rise to 7.6% in three months and 8% over a year.
Issues with Current CPI Data
- The CPI is outdated, based on 2012 consumption patterns, which do not reflect current consumption behaviors or the impact of various subsidies.
- The national inflation figure aggregates data from diverse regions, leading to a loss of nuances.
Upcoming CPI Update
The government will introduce a new series of the CPI on February 12, 2026.
- The base year will be updated to 2024.
- New weightages will be based on the Household Consumption Expenditure Survey 2023-24.
This update is critical for accurately capturing current economic realities.
