The figures for rural and urban areas in December were 5.08% and 4.71%.
He said this forecast was based on a view that inflation will begin to show bigger gains in coming months.
Core inflation, while not the Federal Reserve's preferred inflation measure is still well below the central bank's target of 2%.
The underlying pace of US inflation unexpectedly accelerated in December amid increased shelter costs, reinforcing the outlook for the Federal Reserve to raise interest rates several times in 2018.
Retail inflation in India rose to 5.21% in December 2017 compared to that in December 2016, data released by the Ministry of Statistics and Programme Implementation showed on Friday. In December 2015, it was 3.41 per cent.
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For the full year, CPI rose 2.1%, the same as 2016, while core CPI slowed, posting a 1.8% increase after the 2.2% gain in the previous year. Prices for US Treasuries fell, with the yield on the interest-rate sensitive two-year note rising to the highest since 2008.
Excluding food and energy, the so-called core consumer price index increased 1.8% from a year earlier after a 1.7% advance, including a 0.3% monthly gain that topped analyst projections and was the most in nearly a year.
While India is expected to grow at 6.5 per cent in the current fiscal year ending in March, a continued rise in inflation from 1.46 per cent in June, the lowest on record since 2012, has alarmed policymakers. "However, the reversal of other transient factors such as the expected seasonal moderation in food prices may help to cool inflation", Aditi Nayar, Principal Economist at ICRA said.
The inflation for housing increased to 8.25%, while that for miscellaneous items moved up to 3.79% in December 2017.
Prices of medical care rose 0.3%, as the index for prescription drugs advanced 1%.