RETAIL INFLATION AT 5-YEAR HIGH OF 7.3% IN DECEMBER
Context: According to information released by the National Statistical Office, Retail inflation soared to a five and a half year high of 7.35% in December 2019, with the shortage of onions driving the surge.
- Retail inflation based on the Consumer Price Index was only 2.11% in December 2018 and 5.54% in November 2019.
- The last time retail inflation was this high was the 7.39% recorded in July 2014, just after Prime Minister Narendra Modi began his first term in office.
- The hike in inflation in the ‘vegetables’ category was at 60.5% last month in comparison to December 2018.
- Onion prices were above the Rs. 100 per kg mark in many major cities last month, due to a 26% fall in production.
- Overall, food inflation rose to 14.12 per cent in December as against a negative rate of -2.65 per cent in the same month of the previous year.
- It was also significantly higher than the 10.01% recorded in November 2019. Along with vegetables, high prices of pulses, meat and fish also contributed to the spike.