New Delhi, Jan 12 (FN Bureau) India’s retail inflation measured by Consumer Price Index (CPI) surged to six-month high of 5.59% in December, 2021. The inflation rate was 4.91% in the month of November last year and 4.59% in December, 2020. As per the data released by National Statistical Office (NSO), oil and fats inflation was 24.3% higher in December while clothing and footwear inflation stood above 8$ during the period. Housing inflation stood at 3.6% in December. Commenting on the inflation numbers, ICRA Chief Economist Aditi Nayar said that unfavourable base led the inflation for food and beverages to jump to 4.5% in December from 2.6% in November 2021, driven by vegetables and eggs.
“The early data points towards a broad-based moderation in prices of many food items in January 2022,” she said. The December inflation number is closer to the upper tolerance band of Reserve Bank of India (RBI). The central bank factors in retail inflation while deciding its bi-monthly monetary policy. RBI is expected to maintain retail inflation in the country at 4%, with an upper tolerance limit of 6% and a lower limit of 2%. “Even with inflationary concerns persisting, RBI is likely to be cautious and gradual in its monetary policy normalization, given the uncertainties around COVID situation and fragile economic growth scenario,” said Rajani Sinha, Chief Economist & National Director – Research, Knight Frank India.