Sharp Drop In Food Prices Pulls Retail Inflation Near 4%

The Consumer Price Index (CPI) slipped to 4.06% in the month of January 2021, according to the data released by the Ministry of Statistics & Programme Implementation (MoSPI) showed on Friday. The retail inflation during the month of December 2020 was at 4.59%. This is the second consecutive month the CPI data has come within the Reserve Bank of India's (RBI) upper margin of 6%. The drop in retail inflation is driven primarily by easing food prices. The Consumer Food Price Index (CFPI) or the inflation in the food basket fell to 1.89% in the month of January, down from 3.41% in December 2020. The slide in the food basket was due to a fall in vegetable prices that recorded near 16% decline on-year in January.

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