New Delhi: Retail Inflation surged to a five-month high in December on the back of food, drinks, clothing, footwear, fuel and light higher and led to new challenges for policy makers to the background of the third wave Covid.
Data released by the National Statistics Office (NSO) on Wednesday showed inflation, which was measured by the Consumer Price Index (CPI), up 5.
6% annually in December, up from November 4.
9%.
Rural inflation at 5.5, the shade is lower than 5.5 8% in urban areas.
Separate data issued by NSO showed the growth of industrial output slowed to nine-month lows 1.
4% in November, slower than 4% revised upwards which was recorded in October, led by a slow manufacturing sector and contractions in capital goods and Consumer resistance segment.
This sector has shown signs of reviving after removal of the sidewalk but the ongoing third wave is likely to have an impact on the coming months.
In inflation, the food index rose to 4.
1%, higher than November 1.
9%.
December retail inflation readings are notch under the inflation tolerance ribbon on the RBI.
Inflation has emerged as a policy challenge in recent months but RBI believes that pressure is expected to subside in the coming months.
Retail inflation data shows oil and fat inflation at 24.
3% in December, remaining in two digits.
Inflation of fuel and light rose by almost 11% in December, reflecting strong global prices.
“While CPI inflation has hardened between November and December 2021, uncertainty triggered by the third wave will definitely be prioritized when MPC (Monetary Policy Committee) meets next month.
We now see the possibility that can be ignored from a change in sitting or re-raising the repo in the review Policy February 2022, “said Aditi Narggah, chief economist at ICRA Body Ratings.
In the index slowed industrial production (IIP) for November, Madan Sabnavis, the chief economist at the Bank of Baroda, said, “conditions such as locking, prevailing since mid-December, and can continue until March, will maintain the level of production.
Depression and growth in the quarter Upcoming will be in the region no more than 3-5% even on a low base.
“