Millennium Post

News bad on inflation, good on factory output

In November, retail inflation based on the Consumer Price Index (CPI) was at 4.38 per cent -- the lowest level since government started computing the new series of data in January 2012.

In December 2013, retail inflation was at 9.87 per cent. Despite surge in retail inflation, analysts expect that RBI may ease interest rate in its February monetary policy review. RBI is scheduled to announce its sixth bi-monthly monetary policy on February 3.

Food inflation rose to 4.78 per cent in December 2014, from 3.14 per cent in previous month, showed the official data which was released Monday.

Retail prices of vegetables increased by 0.58 per cent as against a decline of 10.9 per cent in November. Fruits were costlier by 14.84 per cent, while the rate of price rise for the same was at 13.74 per cent in previous month.

Category under food and beverages witnessed a rise of 5 per cent in December, over 3.5 per cent in previous month.

Inflation in protein-rich items like eggs, fish and meat was down at 5.24 per cent in December, from 6.48 per cent in the previous month.

Also, prices of oil and fats declined by 1.24 per cent in December over a decline of 0.83 per cent in November.

“We also have a view that the February policy (of RBI) could see a rate cut. But, I would put a caveat that out of all the pre-conditions that the RBI governor laid down in the last policy ... but I am more concerned about how the budget 2015-16 is going to look like.

“But purely on inflation argument, I would say that the time has come for a rate cut,” said Samiran Chakraborty, Head of Research, StanChart Bank.

Among other items, prices of cereals and their products came down further to 3.98 per cent in December from 5.2 per cent in previous month.

In the pulses and products category, retail inflation in December stood at 7.24 per cent, marginally down from 7.54 per cent in November.

For items in fuel and lights, inflation softened to 3.41 per cent during the month. For milk and its products, the rate of price rise stood at 9.62 per cent in December against 10.24 per cent a month ago.

The rate of price rise in non-alcoholic beverages was 5.95 per cent in December from 5.75 per cent in previous month. Sugar prices fell further by 0.84 per cent during the month compared to a decline of 0.28 per cent rise in November.

The consumer inflation rose to 5.32 per cent in urban India and 4.71 per cent in rural area during December. In the previous month of November, the respective figures stood at 4.69 per cent and 4.09 per cent.
Next Story
Share it