Retail inflation jumps to 7.35% in December, crosses RBI’s comfort level

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Retail inflation rose to about five-and-half year high of 7.35% in December 2019, surpassing the RBI’s comfort level, mainly due to spiraling prices of vegetables as onions were selling costlier.

As per the data released by the National Statistical Office (NSO) on Monday, the spike in inflation in the vegetable segment was 60.5 percent during the month compared to December 2018.

The overall retail inflation based on Consumer Price Index (CPI) was 2.11% in December 2018 and 5.54% in November 2019.

As per the data released by the NSO, the overall food inflation rose to 14.12% in December as against (-) 2.65 percent in the same month of 2018. The food inflation was 10.01% in November 2019.

The previous high in retail inflation was witnessed at 7.39% in July 2014, the year Narendra Modi-led government assumed office for the first term.

The inflation in ‘pulses and products’ was recorded at 15.44%, while in the case of ‘meat and fish’ it was nearly 10%.

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.

The RBI, which mainly factors in the CPI-based inflation, is scheduled to announce its next bi-monthly monetary policy on February 6. In its December policy, the central bank, which had been reducing rates, had kept the repo rate unchanged citing inflationary concerns.

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