CPI inflation for December shoots up by 5.59%; November IIP rises by 1.4%

The country’s retail inflation, which is measured by the Consumer Price Index (CPI), rose to a five-month high of 5.59 per cent in December. Separately, India’s factory output, measured in terms of Index of Industrial Production (IIP), witnessed growth of 1.4 per cent in November, two separate data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed on Wednesday. 

The retail inflation for November was 4.91 per cent. 

The December CPI data has come within the Reserve Bank of India’s (RBI) upper margin of 6 per cent. The government has mandated the central bank to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for a five-year period ending March 2026. 

The CPI data is mainly factored in by the RBI while making its bi-monthly monetary policy. Last month, the Monetary Policy Committee (MPC) of the central bank kept the Repo Rate unchanged for the ninth time in a row at 4 per cent while maintaining an “accommodative stance” as long as necessary. 

The Consumer Food Price Index (CFPI) or the inflation in the food basket spiked on the month during December to 4.05 per cent from 1.87 per cent in November, the data revealed. 

The spike in the food basket was due to a sharp rise in prices of oils and fats, which climbed by 24.32 per cent on the year in December. Apart from this, the meat and fish prices saw a rise of 4.58 per cent, while those of milk and milk products gained by 3.76 per cent and pulses and products rose 2.43 per cent. The vegetables segment slipped by (-) 2.99 per cent, however fruits grew 3.54 per cent. 

Apart from food and beverages, the fuel and light segment rose by 10.95 per cent, clothing and footwear gained 8.30 per cent and the housing segment inched up by 3.61 per cent. 

Meanwhile, the IIP witnessed growth of 1.4 per cent on the year to 128.5 in November. 

The IIP had slipped by 1.6 per cent in November 2020, the data showed. 

The industrial growth so far in 2021-22 (April-November) has surged by 17.4 per cent, compared to contraction of (-) 15.3 per cent in the corresponding period a year ago, the data showed. 

The growth in IIP data in November is primarily on account of the mining sector, which rose 5.0 per cent on the year to 111.9 in November. It was followed by the electricity sector that witnessed growth of 2.1 per cent to 147.9. The manufacturing sector saw a 0.9 per cent growth to 129.6, the MoSPI data showed. 

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