Retail Inflation Jumps To Six Month High Of 5.59% In Dec On Sharp Rise In Food Prices

Retail inflation in December 2021 rose to a six-month high of 5.59 per cent from 4.91 per cent in November 2021, mainly due to sharp rise in food prices as food inflation for the period under review also rose steeply to 4.05 per cent against 1.87 per cent in November 2021.

The rise in quite sharp when compared to December 2020 also, as during the year ago period, retail inflation was at 4.59 per cent while food inflation was at 3.41 per cent.

According to data released by the ministry of statistics and programme implementation, prices of cereals, egg, milk products and prepared meals went up during December 2021.

Apart from these items, prices of clothing and footwear, education, health as well as recreation activities and transportation too witnessed a rise in December 2021 compared to November 2021.

The rise in retail inflation, which is measured on the basis of consumer price index or CPI has taken it to closer to Reserve Bank of India's (RBI) upper tolerance limit.

RBI, which mainly factors in retail inflation while arriving at its bi-monthly monetary policy, expects the inflation print to be somewhat higher over the rest of the year as base effects turn adverse.

According to the RBI, it is expected that headline inflation will peak in the fourth quarter of the current fiscal and soften thereafter.