The retail inflation that for several months remained in the comfort zone of the central bank has started inching up and crossed the 7 per cent mark during December 2019
Retail inflation in onion had crossed 300% in December
But MPC has reasons to not ignore headline inflation
The core deflation indicates slowing growth in the manufacturing category
The Congress leader's comments come a day after data showed that retail inflation rose to about five-and-half year high of 7.35 per cent in December 2019, surpassing the RBI's comfort level
The yield opened at 6.15 per cent mark and moved up further to hover around 6.68 per cent level, according to Clearing Corporation of India Ltd ( CCIL) data
Food inflation shot up to 14.12 per cent in December from 10.01 per cent in November on account of rising prices of vegetables and pulses
Though this is temporary, a sustained situation like this would mean weakened ability to handle the slowdown, especially for the poorest
In Nov, retail inflation had jumped to a more than three-year high of 5.54 per cent on costlier food products
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The states that witnessed high CPI-based inflation rates were Lakshadweep, Tripura, Odisha, Uttar Pradesh, Kerala, Madhya Pradesh, Puducherry, Tamil Nadu, Rajasthan, Manipur and Mizoram
Albeit for a brief period during monsoon and afterwards, retail price of tomato went up to Rs 80 per kg
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Food prices rose the fastest in 5 years for the month in villages
Inflation in the food basket jumped to 10.01%. This compares with 7.89% October and (-) 2.61% in the year ago-month
Economic sentiment is as important as the actual data on the economy
The report said even as food CPI will remain elevated, core CPI will go below 3 per cent in this fiscal.
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But core inflation, which excludes the volatile components of food and fuel, stood at 3.3 per cent in October; this is its lowest in eight years
Inflation in the food basket spiked to 7.89 per cent in October 2019, against 5.11 per cent the previous month.