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India’s CPI-inflation shoots up to 10.56% in December

14 Jan 2013 Evaluate

Dashing hopes of any policy rate cut by the RBI in the upcoming monetary policy review, annual rate of inflation, based on the consumer prices index (CPI) in India, crept higher in the month of December at 10.56 percent.  Meanwhile, Food inflation in the CPI surged to 13.04 percent in December from 11.81 percent in November 2012.

According to the data released by Central Statistics Office, provisional annual inflation rate based on all India general CPI (Combined) for December 2012 on point to point basis stood at 10.56 percent as compared to 9.90 percent for the previous month of November 2012.

According to the Ministry of Statistics and Programme Implementation, which released the monthly provisional CPI on Base 2010=100 along with annual inflation rates for December 2012, all India provisional General (all groups), CPI numbers of December 2012 for rural, urban and combined were at 126.8, 124.0 and 125.6 respectively. The corresponding inflation rates for rural and urban areas for December came in at 10.74 percent and 10.42 percent respectively as against November’s 9.79 percent and 9.72 percent, respectively, which indicated that the rate of price rose in rural areas.

India has the highest retail inflation among the BRICS group of emerging economies - Brazil, Russia, China, and South Africa -- and is way above the Reserve Bank of India (RBI)’s comfort level. However, unlike most central banks, the RBI uses wholesale inflation in its policy formulation, as annual consumer price inflation data was only launched this year in January.

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