Ghar Kharcha: How Inflation Dictates Your New Year's Resolution

In December, retail inflation fell to 5.72%, the lowest level in a year.

<div class="paragraphs"><p>Source: Photo by Mike Enerio on Unsplash</p></div>
Source: Photo by Mike Enerio on Unsplash

Two weeks into the new year, it's been action-packed already. On the one hand, there is the news of layoffs at multiple MNCs, and on the other, there is some good news too: lower inflation.

The pace of price rise had remained elevated through the past year, forcing the central bank to raise the benchmark lending rate to 6.25% and lenders to hike interest rates.

In December, retail inflation fell to its lowest level since December 2021, coming in at 5.72%, according to official data released on Thursday.

Less Carbs, More Veggies

Inflation in food and beverages was at 4.58% in December, against 5.07% in November, led by a continuing fall in vegetable prices. Vegetable prices fell by 15.08%, compared to a fall of 8.08% over the previous month.

However, the prices of several other food items remain elevated. Prices continued to rise in double digits. Wheat prices rose by 22.2% in December 2022—the highest since at least 2015—leading to higher costs of other related products ranging from maida to bakery items.

Salt inflation is at 21.86%, the highest since 2015.

Inflation in clothing and footwear came off its record highs, falling to a six-month low but remaining sticky at 9.58%.

Remember that resolution to shop less this year? It might be worthwhile to give it a shot! Planning to finally save up for that piece of jewellery you have been eyeing? Well, it's only getting more expensive! Gold inflation rose to 8.76%, while silver inflation rose to 2.31%.

Utilities: Same Old

Prices of petrol and diesel fell on an annual basis after having risen by double digits a year ago. Prices of LPG, diesel, and petrol remained largely unchanged over the previous month as well.