This directly causes a further increase in the price of goods sold at retail markets.
According to government data released on January 12, i.e. on Monday, the retail inflation jumped to 7.35% in December as opposed to 5.54% in November. The data released by the government showed that food inflation in December 2019 was 14.12%, while the vegetable inflation surged to 60.5%. The core inflation was recorded at 3.7%.
This directly causes a further increase in the price of goods sold at retail markets. If you are confused regarding what retail inflation means, here is a guide.
Retail inflation had risen to 5.54% in November indicating higher food prices. Prices of several vegetables increased in October after supplies were diminished following heavy rainfall that damaged harvests.
The news may be read in the backdrop of the fact that the Reserve Bank of India (RBI) had kept its interest rates unchanged in December following five subsequent cuts totalling a deduction of 135 basis points. This was done to combat rising inflation.
RBI will announce its next interest rate decision on February 6, after Union Minister of Finance Nirmala Sitharman presents the Annual Budget.
One of the reasons behind the surge of inflation in India is the rise in global oil prices due to tension between the US and Iran. Oil prices briefly rose to above $70 per barrel last week. Notably, India is the third-biggest oil importer in the world.
RBI Governor Shaktikanta Das had said last week that price stability is the primary objective of the central bank as rising inflation disproportionately affects the lives of the poor.
The annual rate of inflation based on monthly Wholesale Price Index (WPI) rose to 0.58% in November as opposed to 0.16% in October, the previous month, according to an official statement released by the Ministry of Commerce and Industry, Government of India.
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