Retail inflation rose to 7.59% in January from 7.35% the month before, government data showed on Wednesday. This is the highest rate of consumer price inflation since May 2014, Bloomberg reported.
In January, inflation was pushed up once again by an increase in food prices. Consumer Food Price Inflation eased only marginally to 13.63% in January from 14.12% in December. Prices of vegetables shot up by 50.9% in January compared to 60.5% in December. Prices of pulses and products rose by 16.71% in January against 15.44% in December. Inflation in food and beverages stood at 11.8% as compared to 12.16% in December 2019.
This is the second straight month when rate of inflation exceeded the tolerance band of the Reserve Bank of India’s Monetary Policy Committee. The central bank had kept its repo rate unchanged at 5.15% last week, despite slowing growth, and revised up its inflation projections, estimating it would range between 5.0% and 5.4% in the first half of the upcoming fiscal year.
Industrial production declined 0.3% in December
Meanwhile, separate data released by the government showed that industrial output contracted 0.3% in December 2019, compared to the same month in 2018, because of decline in the manufacturing sector. The cumulative growth in April-December over the corresponding period of the previous year was 0.5%, the data showed.
Manufacturing sector output declined by 1.2% compared to growth of 2.9% in the same month a year ago. Electricity generation contracted 0.1% compared with a contraction of 5.7% in November 2019.
Mining output rose 5.4% in December compared to a growth of 2.7% in November.