Food and beverage segment is expected to revert to an inflation in January 2026 after remaining in the deflationary zone in six of the last seven months
After the year-on-year (YoY) consumer price index (CPI) inflation expectedly rose to 1.3 per cent in December 2025 from 0.7 per cent in November 2025, Icra has stated that the retail inflation is likely to cross the 2 per cent mark in January 2026.
In a report, Icra noted that the food and beverage segment is expected to revert to an inflation in January 2026 after remaining in the deflationary zone in six of the last seven months. This will push the headline CPI inflation print above the 2 per cent mark after a gap of four months, crossing the lower end of the monetary policy committee (MPC’s) medium term target range of 2 to 6 per cent.
However, the December 2025 reading is the last print as per the current series (base year of 2012) and the next print, which will be released on 12 February 2026, will be as per the new CPI series (base year of 2024), which would envisage a change in the weighing pattern and consumption basket as per the Household Consumption Expenditure Survey (HCES) results of 2023-24.
The uptick in December inflation was largely led by narrower deflation in food and beverages (to -1.8 per cent from -2.8 per cent) and hardening inflation in miscellaneous items (to 6.2 per cent from 5.6 per cent). Moreover, core inflation (CPI excluding F&B, fuel & light and petrol and diesel for vehicles) jumped to a 28-month high of 4.8 per cent in December 2025, driven by an uptick in precious metal prices; excluding gold and silver.
The report pointed out that Icra believes that it would be prudent to wait and assess the upcoming CPI (base: 2024) and GDP (base: 2022-23) series, which is to be released later in February 2026, as these will determine the current growth-inflation mix and aid in forming a fresh outlook
