January retail inflation eases to 5.1%; December IIP growth at 3.8%

The consumer price index (CPI)-based inflation for the month of January came in at 5.1 per cent, according to the Ministry of Statistics and Programme Implementation (MoSPI)'s data.

In December 2023, retail inflation reached its four-month high of 5.69 per cent, following 5.55 per cent recorded in November. In January last year, the rural retail inflation was 6.65 per cent, while the urban inflation was 4.79 per cent.

The rural inflation was 5.34 per cent in January, compared to 5.93 per cent in December. The urban inflation for January eased to 4.92 per cent, vs 5.46 per cent in January.

Food and beverage recorded an inflation of 8.3 per cent in January 2024, compared to 8.70 per cent the previous month, which was also the highest inflation recorded in any category at the time.

In the first monetary policy committee review of 2024, the Reserve Bank of India Governor Shaktikanta Das stated that the inflation outlook would be influenced by food prices, which remains uncertain.

The governor said, "High frequency food price indicators point to an increase in prices of key vegetables which may push CPI inflation higher in the near-term. The ongoing rabi sowing progress for key crops like wheat, spices and pulses needs to be closely monitored. Elevated global sugar prices are also a matter of concern," he said.

The RBI retained the inflation forecast for 2023-24 at 5.4 per cent. For the current quarter (Q4), the projection was lowered to 5 per cent from 5.2 per cent earlier. For FY25, the inflation projection has been kept unchanged at 4.5 per cent, with Q1 at 5 per cent, Q2 at 4 per cent, Q3 at 4.6 per cent and Q4 at 4.7 per cent.

IIP for December 2023

The Index of Industrial Production (IIP) growth for December 2023, released by the MoSPI, was 3.8 per cent, compared to 2.4 per cent recorded in November. November witnessed the lowest IIP growth since March 2023, when it was 1.7 per cent.