Retail inflation soars to 15-month high, industrial output growth slows

Retail inflation hit a 15-month high of 4.88 per cent in November due to costlier fuel, vegetables and eggs, as per data released by the Central Statistics Office (CSO) yesterday

Retail inflation hit a 15-month high of 4.88 per cent in November due to costlier fuel, vegetables and eggs, as per data released by the Central Statistics Office (CSO) yesterday. The inflation, based on Consumer Price Index (CPI), was at 3.58 per cent in October. It was 3.63 per cent in November 2016. The previous high was recorded at 5.05 per cent in August last year.

The November inflation number is higher than the Reserve Bank's 4 per cent medium-term target, reducing the room for the central bank to cut rates in near future. Economists polled by Reuters had predicted consumer inflation to rise to 4.2 per cent in November, following unseasonably heavy rains that sent vegetable prices soaring. Vegetable prices showed a spike, with prices rising 22.48 per cent year-on-year in November. Higher fuel prices (up nearly 8 per cent) also pulled inflation higher, reported NDTV.

ADVERTISEMENT

At its December 6 policy meeting, the RBI raised its inflation projection by 10 basis points to between 4.3 per cent and 4.7 per cent for the six months ending in March. It kept interest rates steady and stressed a neutral policy stance. The RBI cut rates by 200 basis points from January 2015 until August this year amid falling inflation. Some economists say that the RBI is likely to keep interest rate unchanged till the first half of next year.

Separately released data also showed industrial output growth easing to 2.2 per cent in October from upwardly revised 4.1 per cent year-on-year increase in September, as demand continued to suffer from disruption caused by the rollout of the new goods and services tax (GST).

Catch up on all the latest Mumbai, National and International news here

Download the new mid-day Android and iOS apps to get updates on all the latest and trending stories on the go

"Exciting news! Mid-day is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest news!" Click here!