Retail Inflation For January Cools To 2.05%, IIP Recovers

Retail inflation measured by consumer price inflation index (CPI) for the month of January came in lower at 2.05% due to continuing deflation observed in food items as well as decline in fuel inflation.

IIP or Index for Industrial Production of India for December month gained ground and recovered to 2.4% versus 0.5% in November 2018. The recovery came in on the back of sharp surge in manufacturing index from -0.4% to 2.7% in December month.

Inflation for the sixth consecutive month has stood below the medium term target of the central bank of 4%. For the December month, CPI figure has been revised to 2.11% against the earlier notified figure of 2.19%.

In line, core inflation also declined from 5.7% for December to 5.4% in January, thus providing some relief in respect of stickiness in non-fuel and non-food inflation.

RBI in its monetary policy review last week revised the trajectory of inflation downwards to 2.8% in the last quarter of current FY, 3.2-3.4% for the H1FY 20 and 3.9% for the third quarter of FY20.

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