Vegetable inflation jumping to an over six-year high and pulses inflation rising to a more than 3-year high were the key reasons driving retail inflation.
Wholesale price index (WPI)-based inflation surged to a seven-month high of 2.59 per cent in December 2019, as against 0.58 per cent in November, due to a sharp rise in prices of food articles like onions and potatoes, according to the data released by the Ministry of Commerce & Industry on Tuesday. WPI was at 3.46 per cent in December 2018.
The inflation for food articles rose to 13.24 per cent in December, as against 11.08 per cent a month earlier, while for non-food articles it rose nearly fourfold to 7.72 per cent from 1.93 per cent in November. Analysts note that the tight fiscal position of the central government, along with rising retail inflation, means the Reserve Bank of India (RBI) will have limited room to cut policy rates next month.
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