India’s retail inflation reached a nearly six-year high in January, as it surged to 7.59%. Prior to this, in May 2014, retail inflation was at 8.33%. Consumer Price Index inflation stood at 7.59% in January 2020, compared to 7.35% in December 2019, according to data released by the Ministry of Statistics and Program Implementation on Wednesday.
Retail inflation inched up to 7.59% in January due to costlier food items vegetables, eggs, meat and fish, increase in telecom tariffs and fuel costs, pushed India's retail inflation during January to 7.59% from December's 7.35%. It was at 1.97% for the corresponding period of last year.
The inflation of 7.59% is nearly double that of the Reserve Bank of India’s medium-term target of 4% for the fourth straight month. 4% was the target for the period from August 5, 2016 to March 31, 2021, with an upper tolerance limit of 6% and the lower tolerance limit of 2%. Last week, the RBI also set an inflation target of 5.4-5.0% for the first half of 2020-21 and 3.2% for third quarter of 2020-21.
Food inflation last month was 13.63%, compared with (-)2.24% in January 2019. However, it is down from 14.19% in December.
The Reserve Bank of India had kept the key policy rate unchanged earlier this month mainly due to high inflation.
The country's industrial output also contracted by 0.3% in December, weighed by a decline in the manufacturing sector, government data showed on Wednesday. This is as opposed to a rise of 1.82% in November and 0.5% during the corresponding period of the previous year.
“The 'Quick Estimates of Index of Industrial Production' with base 2011-12 for the month of December 2019 stands at 133.5, which is 0.3 per cent lower as compared to the level in the month of December 2018," the Ministry of Statistics & Programme Implementation said.
"The cumulative growth for the period April-December 2019 over the corresponding period of the previous year stands at 0.5 per cent.”
According to the National Statistical Office (NSO) data, manufacturing sector output declined by 1.2% compared to growth of 2.9% in the same month a year ago. Electricity generation also dipped 0.1% as against a growth of 4.5% in December 2018. Mining sector output grew by 5.4%, compared to a contraction of 1% earlier.
IIP growth during April-December period of the current fiscal decelerated to 0.5% from 4.7% expansion in the same period of 2018-19.
With inputs from agencies