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Retail inflation slows down to 3.41% in December

13 Jan 2017 Evaluate

The Inflation measured by the Consumer Price Index (CPI) has slowed down to 25-months low of 3.41 percent in December 2016, as compared to 3.63 percent in November 2016, reflecting weak demand as consumers grappled with cash crunch following demonetisation. The decline in retail inflation has been mainly on account of falling prices of vegetables and pulses. The easing in CPI data is in line with the Reserve Bank of India’s forecast for an average of 5 percent inflation for this financial year.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the Consumer Price Index (CPI) (Rural, Urban, Combined) on Base 2012=100 stood at 3.83 percent, 2.90 percent and 3.41 percent respectively compared to 4.13 percent, 3.13 percent and 3.63 percent respectively in November 2016 and 6.32 percent, 4.73 percent and 5.61 percent respectively in December 2015.

The data also showed that Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for December 2016 declined considerably to 2.06 percent, 0.15 percent and 1.37 percent respectively compared to 2.79 percent, 0.75 percent and 2.03 percent respectively in November 2016 and 6.41 percent, 6.31 percent and 6.40 percent in December 2015.

The overall food inflation was 1.37 percent in December, lower than 2.11 percent recorded in last month. Inflation in vegetables category slipped again in the negative territory to (-) 14.59 per cent, as against 10.29 per cent in November. Likewise, prices of pulses and products also slipped in negative territory at (-) 1.57 in December. However, inflation in fruits came in at 4.74 per cent, slightly up from November's 4.60 per cent.

Within the food items, the inflation eased for Meat and fish 4.79%, Spices 6.06% and Sugar and Confectionery 21.06%. The inflation also eased for Egg 6.41%, Prepared meals, snacks, sweets etc. to 5.64% and Milk and products 4.40%. On the other hand, inflation moved up for Oils and fats 2.86% and Cereals and products 5.25% in December 2016. The inflation for clothing and footwear eased marginally to 4.88% in December 2016, while the CPI inflation of fuel and light surged to 3.77% in December 2016.

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