Retail Inflation In India Increased to 5.59% In December, At A 5-Month High Range

India's retail inflation rate has increased to a 5-month high range at 5.59% (YoY) In December 2021, according to an official statement by the union government. In December 2020, the same data was reported at 4.59%. Retail inflation is measured by the Consumer Price Index (CPI). However, in the earlier months, the rates were lower. In November, the retail inflation data stood at 4.91%, and 4.48% in October. The firm rise in inflation is a concerning topic for the country now.

On the other hand, according to the Ministry of Statistics and Programme Implementation, the Index of Industrial Production (IIP) or the factory output has increased to1.4% in November.

Commenting on the Indian inflation rate, earlier, Aditi Nayar, ICRA stated, "The recent correction in prices of many food items other than tomatoes, has provided relief for the inflation trajectory, especially given the unfavorable base effects that lie ahead...In our assessment, as long as the CPI inflation remains within the target of 2-6%, the MPC and RBI will prefer to prioritize growth, and maintain policy support to impart sustainability to the recovery and help it to broaden."

India's CPI data has been a factor in the latest RBI bi-monthly monetary policy meeting. However, the RBI kept the repo rate the same low at 4%, to maintain an 'accommodative stance', as the economy has not been recovered from the affects of the pandemic much.