India’s retail inflation spiked to 7.59 per cent for January as against 7.35 per cent in December, data by the National Statistical Office (NSO) revealed. This rise comes on the back of rising prices of food products and vegetables.

January recorded the inflation rate at 2.05 per cent, much above the Reserve Bank of India’s medium-term target of four per cent.

The Industrial production (IIP) also dipped by 0.3 per cent in December as compared to 2.5 per cent growth in the same month last year, owing to a sharp fall in the manufacturing sector. Electricity generation also contracted 0.1 per cent as against an increase of 4.5 per cent in December 2018.

Economists predict a further slowdown in industrial production as global trade remains affected due to the coronavirus outbreak. ‘We expect third-quarter growth to be muted and there could be supply-side disruptions for some commodities we import from China due to the coronavirus,’ Upasna Bhardwaj, an economist at Kotak Mahindra Bank told The Economic Times.

Mining sector output also increased by 5.4 per cent as compared to a fall of one per cent earlier.

The IIP growth during the period between April to December of the ongoing fiscal slowed to 0.5 per cent from an earlier 4.7 per cent increase in the same period of 2018-19.

According to the NSO data, inflation in food items decreased to 13.63 per cent from 14.12 per cent in December 2019. Inflation in vegetables improved to 50.19 per cent in January, as against 60.50 per cent in December 2019. The prices of cereals and products also increased by 5.25 per cent.

Onion prices, which have been making headlines for months now, have been on the rise leading to a surge in food inflation that has accelerated since March 2019.

The RBI in its February policy review kept the repo rate constant at 5.15 per cent, as inflation remained ‘highly uncertain’.

Also Read: Retail Inflation Jumps To 7.35% in December, Highest Since July 2014: Govt Data