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Print Posted 01/13/2018 in Category 1

India News 2018, Retail inflation jumps to 17 months heigh 5.2%

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India News 2018, Retail inflation jumps to 17 months heigh 5.2%

India economy may suffer due to increased inflation as the authorities unable to push for a rate cut. The retail inflation is showing a trend of going up as it hits 17 month heights as per the latest inflation data. This gives less leg room for RBI to cut interest rates. Together with increased oil prices that is going up, as the price for brent crude crosses crucial 69 mark in international market, this trent is likely to continue. Well.. this may be a silver lining for the salaried class and other small investors that the interest rates on deposit may not go down further. It at all the interest rates can only go up from here.

India News 2018

The retail inflation seems to show no sign of decline. For December, there has been a considerable rise in the retail inflation to 5.21 per cent as compared to 4.88 per cent recorded in November. The recent rise in the retail inflation may put pressure on the Reserve Bank of India (RBI), which is supposed to keep it at 4 per cent with a margin of around 2 per cent. It is important for it to keep retail inflation under control. The recent numbers may put pressure on it to keep the repo rate unchanged.

The reason behind the high retail inflation is rise in prices of food items, egg, and vegetables. The retail inflation, based on Consumer Price Index (CPI), was 4.88 per cent in November. In December 2015, it was 3.41 per cent. As per the data released by the Central Statistics Office (CSO), inflation for the food basket increased to 4.96 per cent in December from 4.42 per cent in the preceding month. Inflation saw moderate rise in case of cereals and pulses.

The inflation, based on monthly WPI (Wholesale Price Index), rose to eight-month high of 3.93 per cent for November on the back of rise in food and fuel prices. WPI Inflation stood at 3.59 per cent during the previous month and 1.82 per cent during the corresponding month of the previous year. It rose to six-month high of 3.59 per cent in October as compared to 2.6 per cent for in September and 1.27 per cent during the corresponding month of the previous year.

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