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CPI jumps to over five-year high of 7.35% in December
Jan-14-2020

With spiraling prices of vegetables, India’s retail inflation based on Consumer Price Index (CPI) jumped to an over five-year high of 7.35% in December 2019. The CPI was 2.11% in December 2018 and 5.54% in November 2019. The previous high in retail inflation was witnessed at 7.39% in July 2014. The inflation was above the Reserve Bank of India’s (RBI) upper tolerance limit of 6% at the time of economic growth slowdown. The overall food inflation rose to 14.12% in December as against (-) 2.65% in the same month of 2018. It was also significantly higher than the 10.01% recorded in November 2019.

As per the data of the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation, the CPI (Rural, Urban, Combined) on Base 2012=100 for December 2019, stood at 7.26%, 7.46% and 7.35%, respectively, compared to 1.50%, 2.91% and 2.11%, respectively in December 2018. The index value of CPI for combined stood at 150.4. The data also showed that consumer food price index (CFPI) for all India Rural and Urban for December 2019 stood at 12.97% and 16.12%, respectively, compared to -2.99% and -1.89%, respectively in December 2018. The index value of CFPI for combined stood at 155.2 for the month of December.

The spike in inflation in the vegetable segment was 60.5% during the month compared to December 2018. Onion prices were above the Rs 100 per kg mark in many major cities last month, due to a 26% fall in production. The inflation in 'pulses and products' was recorded at 15.44%, while in case of 'meat and fish' it was nearly 10%. Household goods and services grew by 1.75% from 2.2% in November. Health inflation grew by 3.80% as against 5.5% in the preceding month. Housing inflation stood at 4.3% compared to 4.5% last month. Fuel and light inflation stood at 0.7% compared to a contraction of 1.9% last month.

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