Rising prices of vegetables catapult retail inflation to 4-month high

Retail inflation surged at the fastest pace, touching a four-month high of 5.69 per cent in December last year, according to the data released by the National Statistical Office (NSO) today. The reason for this was stated to be a steep rise in prices of food items, which constitute fifty percent of the consumer price index.

Delhi : Retail inflation soared to a four-month high of 5.69 per cent in December last year due to steep rise in prices of vegetables, pulses, spices and fruits, according to the data released by the National Statistical Office (NSO) today. The data revealed that the retail inflation surged at the fastest pace all through those four months.

The factory output slipped to an eight-month low of 2.4 per cent in November as against 7.6 per cent a year ago, due to slower growth in manufacturing, production of capital goods and so on. The rate of rise in prices of food items increased to 9.53 per cent in December this year as against 4.19 per cent in December last year. The food basket consists of fifty percent of the consumer price index (CPI).

In August 2023, inflation had touched a high of 6.83 per cent. The latest data showed that inflation in the vegetable segment was at 27.64 per cent on an annual basis, followed by 'pulses and products' at 20.73 per cent, and spices at 19.69 per cent. However, prices of 'oil and fats' declined by 14.96 per cent. The retail inflation was higher in rural areas at 5.93 per cent in December, while it was 5.46 per cent in urban India.

However, the inflation in the food basket was lower in rural areas compared to urban centres. Commenting on the data, Aditi Nayar, Chief Economist, ICRA said the sequential uptick in the headline CPI inflation in December 2023 was entirely led by the food and beverages segment, with all the other sub-groups either reporting an easing or similar year-on-year prints compared to the previous month.

"Within the food segment, vegetables were expectedly the main culprit, even as seven of the 12 sub-segments witnessed a moderation in their year-on-year inflation print in the month," she said. The Reserve Bank of India has been tasked by the government to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side. According to the NSO data, the lowest inflation was witnessed in Delhi at 2.95 per cent, and the highest in Odisha at 8.73 per cent. (With PTI inputs)

Read More