Bringing some relief to the policymakers who have an arduous task of pulling the economy out of a stagflation-like situation, the provisional annual inflation rate based on all India general Consumer Price Index (CPI) (Combined) eased more than the street's expectation, at a three-month low level of 9.87% for December 2013 on point to point basis, as compared to record high level of 11.24% for the previous month of November 2013, which was revised to 11.16%.
The corresponding provisional inflation rates for rural and urban areas for December 2013 are 10.49% and 9.11% respectively. Inflation rates (final) for rural and urban areas for November 2013 are 11.66% and 10.53% respectively.
The drop in retail inflation was mainly on account of food inflation, which eased to 12.16% against 14.72% in November, though vegetable prices rose by 38.76% in December from a year earlier, compared with a 61.6% increase in the previous month. Meanwhile, Fuel and Light; Clothing, bedding and foot-ware segment registered growth of 6.98% and 9.25% over a period ago.
The latest data further fuels the case for RBI keeping its key interest rates on hold for a second successive month at its policy review on January 28, after November factory output, disappointed the street for second consecutive month, by further contracting 2.1%.
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