India’s retail inflation rose to a four-month high of 5.69% in December 2023 due to a rise in food prices, data from National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) said on Friday.
In November, the retail inflation was 5.55% while in December last year, the retail inflation was 5.72%. The food inflation came in at 9.53% in December compared to 4.19% in December last year.
In November 2023, the food inflation was 8.7%.
“December CPI inflation printed a tad better than our expectations at 5.69%, but still rose mildly vs last month. While the food inflation data on a sequential basis was underpinned by the seasonal contractionary behavior seen in December, we reckon the perishables, specifically veg prices easing was lower than the average seasonal behavior,” Madhavi Arora, Lead Economist at Emkay Global said.
According to MoSPI data, the highest inflation was recorded in the food and beverages category at 8.70%.
“Nonetheless, the food inflation has still ticked up on YoY basis. The Mandi prices are showing correction in perishables to continue, while select protein goods would need a watch,” Arora said.
“Encouragingly, core inflation has eased further to 3.77%, led by seasonal sequential contraction in housing, but even ex-housing, the core momentum has remained contained. The inflation downtrend will be more visible in 4Q, averaging 5.1%, while core could be sub 3.75%,” she added.
MoSPI has also released the Index of Industrial Production (IIP) for November saying it fell to 2.4%, the lowest since March 2023 when it was 1.7%.
Among the sectors, manufacturing grew at the slowest pace of 1.2% as compared to November 2022. The manufacturing sector was pulled down by apparel, furniture, computer, electronic and optical products industries, all of which saw a de-growth of over 20%.
The electricity sector saw a 5.8% growth and the mining sector witnessed a 6.8% growth in November.
