India’s retail inflation rose sharply to 7.35%, 65-month high, in December, owing to the rise in food prices.
The Consumer Price Index (CPI) surpassed the Reserve Bank of India’s (RBI’s) target of 4 percent for the third consecutive month in December 2019, which is highest since July 2014.
In July 2014, the CPI was 7.39 percent, slightly higher than December 2019’s figure of 7.35 percent.
The figure also marks an increase in inflation from November when the retail inflation was 5.54 percent, a 40-month high.
As per the data provided by the government, the food inflation rose to 14.12 percent in December as against (-) 2.65 percent in December 2018. It was 10.01 percent in November 2019 and is one of the major contributors to inflation.
Vegetable prices shot up 60.5%, with a 53.37% increase in urban areas and a 75% hike in rural areas in December. Prices of pulses and products also rose 15.44%, in rural and urban areas. Overall, the inflation rate of the food and beverage category was 12.16%, fruits 4.45% and prepared meals, snacks, sweets, etc 2.20%.
Further, the inflation also increased for oils and fats 3.11%, sugar, and confectionery 3.35%, meat and fish 9.57%, egg 8.79%, and non-alcoholic beverages 1.42% while prices of fuel and light increased just by 0.7%.
Onion prices significantly contributed to the rise in food inflation.
In its December policy review, the RBI had kept policy rates unchanged for the first time this year expecting higher inflation rates.
The central government has mandated the Reserve Bank of India to keep inflation in the range of 4% with a margin of 2% on either side.
Also Read:Wholesale Price Inflation Rises To 0.58%, Onions Take Food Inflation To 71-Month High