India's annual retail inflation accelerated to 5.59% in December from 4.91% in the previous month, pushed up by rising prices of manufactured items, government data released on Wednesday showed.
Analysts in a Reuters poll had predicted annual inflation at 5.80%.
COMMENTARY: GARIMA KAPOOR, ECONOMIST - INSTITUTIONAL EQUITIES, ELARA CAPITAL, MUMBAI
"While today's CPI print suggests the seasonal decline in food prices has begun to finally materialize, unfavourable base and elevated core inflation amid continued supply side bottlenecks due to Omicron will keep the headline print elevated around 5% over the next couple of months."
"With the resurgence of the pandemic and resulting disruptions in economic activity, our call for a February 2022 hike in reverse repo now looks uncertain. We expect MPC to be in wait-and-watch mode in February policy and we push the reverse repo hike expectation to April 2022. We retain our projection for first repo rate hike in Q2FY23."