In December 2024, the producer price index (PPI) rose by 0.2%, falling short of the anticipated 0.4% increase and down from November's 0.4% rise.

The Reserve Bank of India (RBI) has kept its repo rate steady at 6.5% for the eleventh consecutive time, aiming to balance inflation control with economic growth.

The lower PPI reading hints at a potential slowdown in inflation, possibly indicating a weakening economy.

A notable factor in the PPI increase was a 3.5% rise in energy prices, driven by a significant 9.7% spike in gasoline prices, although food prices saw a slight decline.

Former RBI Governor Shaktikanta Das emphasized that lower inflation would enhance disposable income for households, thereby supporting consumption and investment demand.

Wholesale prices, which serve as an early indicator of consumer inflation trends, are closely monitored due to their influence on the Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) index.

The inflation figures released were slightly below economists' forecasts, resulting in a positive reaction in U.S. markets.

Following the PPI report, stock market futures rose while Treasury yields decreased after experiencing a sharp increase earlier in January 2025.

India's annual retail inflation rate for December 2024 was reported at 5.22%, a decline from 5.48% in November, as announced by government data on January 13, 2025.

Food inflation decreased to 8.39% in December, down from 9.04% in November, largely due to high prices of vegetables, fruits, edible oils, eggs, and cereals.

During its latest policy meeting, the RBI adjusted its inflation forecast for the fiscal year from 4.5% to 4.8%, while maintaining its neutral stance.

The US economy showed signs of slower growth in December 2024, which may suggest easing inflationary pressures and could influence future Federal Reserve interest rate decisions.