CPI inflation dips to 25 months low of 3.4% in December 2016

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Foods and vegetables remained major contributors to dip in inflation

The all-India general CPI inflation dipped to 25-months low of 3.41% in December 2016 (new base 2012=100), compared with 3.63% in November 2016. The corresponding provisional inflation rate for rural area was 3.83% and urban area 2.90% in December 2016 as against 4.13% and 3.13% in November 2016. The core CPI inflation declined to 4.81% in December 2016 from 4.90% in November 2016. The cumulative CPI inflation was nearly flat at 4.85% in April-December 2016 compared with 4.79% in April-December 2015.

Among the CPI components, inflation of food and beverages declined to 1.98% in December 2016 from 2.56% in November 2016 contributing to the fall in CPI inflation. Within the food items, the inflation eased for Vegetables to -14.59% , Pulses and products -1.57% , Meat and fish 4.79% , Spices 6.06% and Sugar and Confectionery 21.06% . The inflation also eased for Egg 6.41% , Prepared meals, snacks, sweets etc. to 5.64% and Milk and products 4.40% On the other hand, inflation moved up for Oils and fats 2.86% and Cereals and products 5.25% in December 2016.

The inflation for housing eased to 4.98% , while that for miscellaneous items also fell to 4.73% in December 2016. Within the miscellaneous items, the inflation for Personal care and effects plunged to 6.42% , and Health 4.45% , while moved up for Household goods and services to 4.45% , Education 5.47% and Transport and communication 4.04% in December 2016.

The inflation for clothing and footwear eased marginally to 4.88% in December 2016, while the CPI inflation of fuel and light surged to 3.77% in December 2016.

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