India's Inflation Dynamics Shift Amid Economic Uncertainty

India's wholesale inflation rose to 2.37% in December, up from 1.89% in November, driven by increased prices of primary articles and manufactured goods, while food prices showed mixed trends with a slight overall slowdown. Retail inflation eased to 5.22% in December from 5.48% in November, offering potential for interest rate cuts. Despite the moderation, inflation remains above the RBI's target, largely due to elevated food prices, particularly vegetables, affected by weather-related disruptions. Analysts anticipate further inflationary pressures due to rising crude oil prices and currency depreciation. The RBI has downgraded its growth forecast for the fiscal year, signaling uncertainty in economic recovery. Favorable monsoon conditions and a bumper harvest might contribute to easing food prices in the coming months, potentially allowing the central bank to adjust monetary policy in response to inflationary trends.