Even as the growth rate of the Indian economy is slowing down, and the index of industrial production (IIP) is actually showing negative growth for three consecutive months, August to October (over the corresponding months a year ago), the inflation rate in the economy has started accelerating. Significantly, the acceleration in inflation has been the sharpest precisely during these very months when the contraction in industrial output has been the most pronounced.
India’s retail price inflation for November 2019 (over November 2018) was 5.54%. The inflation rate so calculated has been rising every month since January 2019, reaching 3.28% in August; its rise has been particularly steep since then, to 3.99% for September, 4.62% for October and 5.54% for November.
What is particularly striking is that the rise in the current inflation is driven by food articles: food prices rose by 10.01% in November (compared to 7.89% in October); within food articles the rise in vegetables was 35.99%, pulses 13.94%, meat and fish 9.38%, eggs 6.20%, spices 4.33%, cereals 3.71%, milk 3.46% and fruits 3.29%. This increase in food prices is the highest since December 2013.
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