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December CPI inflation edges higher to 5% against 4.38% in November

13 Jan 2015 Evaluate

Snapping four consecutive month easing trend, India’s Consumer Price Index (CPI) edged higher to 5% in December as compared 4.38% in November. However, the number was way lower than street expected figure of ‘5.20%’. Notably, the General Indices for rural, urban and combined are 146.7, 142.5 and 144.9 respectively. The corresponding provisional inflation rates for rural and urban areas for the month under review stood at 4.71% and 5.32% as compared to 4.09% and 4.69% respectively in the previous month.

The Consumer Price Index (CPI) inflation for the month of December rose to 5%, driven by food price inflation which came in at 4.78% against 3.17%, with vegetable price inflation rising by 0.58% against a de-growth of 10.9% in November. The newly introduced CFPI of December, 2014 for rural, urban and combined stood at 150.3, 146.4 and 149.1 respectively.

Inflation of food and beverages (combined), with 59.31% weightage of the index, edged up to 5% as against 3.50% in November. Besides, Fuel and light prices, with 10.42% weightage in the index rose to 3.41% on a yearly basis against 3.27% in November. However, inflation in clothing, bedding and footwear eased to 6.51% in month under review against 6.97% in November.

The latest data bolsters the case for RBI to cut rates in its upcoming monetary policy review in February. RBI has kept interest rates unchanged at 8% over the past year, ignoring suggestions from the government and industry’ to ease monetary policy.

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