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Retail inflation closes to RBI’s target, highest in six months; Industrial production growth at nine-month low

Due to the increase in the prices of food items, the rate of increase in retail inflation reached 5.59 percent in December 2021, which is the highest since July last year.

Due to the increase in the prices of food items, the rate of increase in retail inflation reached 5.59 percent in December 2021, which is the highest since July last year. On the other hand, the growth of industrial production reached a nine-month low of 1.4 per cent in November. Due to this, a double challenge has arisen in front of the government as the countdown for the budget for the next financial year 2022-23 has started.

In December 2021, the rate of growth of retail inflation reached close to the upper limit of 2-6 percent set by the central bank RBI. At the same time, the rate of retail inflation based on the Consumer Price Index (CPI) stood at 4.91 percent in November 2021 and 4.59 percent in December 2020. These figures are released by the National Statistical Office (NSO).

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RBI looks at retail inflation data

Due to the reduction in tax on oil, the relief that the common people got from inflation, it was reduced by the increased prices of food items. The food inflation rate released by the NSO stood at 4.05 per cent last month from 1.87 per cent in November. In the monetary review held every two months, RBI mainly looks at the data of retail inflation. According to the data released by the NSO, the prices of cereals, eggs, spices, ready meals, sweets and milk and its products were higher in December last month as compared to November.

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The pace of industrial production remains sluggish for the third month

According to the data released by NSO, the pace of growth of the country’s industrial production remained sluggish for the third consecutive month and in November 2021, there was a growth of only 1.4 percent. Capital goods output contracted at the fastest rate in nine months at 3.7 per cent in November, while consumer durables grew at its worst in 15 months despite a favorable base, contracting by 5.6 per cent. In November, the manufacturing sector grew by 0.9 per cent, mineral production by 5 per cent and electricity generation by 2.1 per cent.

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