The year-on-year (YoY) CPI inflation expectedly rose to 1.3% in December 2025 from 0.7% in November 2025 (ICRA P: +1.4%). The uptick was largely led by narrower deflation in food and beverages (F&B: to -1.8% from -2.8%) and hardening inflation in miscellaneous items (to +6.2% from +5.6%). Moreover, core inflation (CPI excluding F&B, fuel & light, and petrol and diesel for vehicles) jumped to a 28-month high of 4.8% in December 2025 (+4.4% in November 2025), driven by an uptick in precious metal prices; excluding gold and silver, core-CPI remained unchanged at 2.4%. Looking ahead, ICRA expects the F&B segment to revert to a YoY inflation in January 2026, pushing up the headline CPI print above the 2.0% mark, after a gap of four months. ICRA expects a pause in the Monetary Policy Committee’s (MPC) February 2026 policy review, as it would be prudent to wait and assess the updated CPI (base: 2024) and GDP (base: 2022-23) series, which are to be released later in that month, since these will determine the current growth-inflation mix and aid in forming a fresh outlook.

EXHIBIT: CPI inflation rose to 1.3% in December 2025 from 0.7% in November 2025; core-CPI inflation also hardened to a 28-month high of 4.8% from 4.4%, largely led by elevated precious metals inflation