CPI Inflation Falls To An 18-Month Low

India's retail inflation drops to 2.19% in December WPI inflation at eight-month low

WPI inflation at 8-month low of 3.80 per cent in Dec on softening fuel, food prices

Annual wholesale price inflation edged down to 3.80 percent last month, as food prices hardly rose and fuel cost increases nearly halved, government data showed on Monday.

Prices of primary articles - including food articles - which account for more than a fifth of the entire wholesale price index, came in at 2.28 percent in December as against 0.88 percent in November and 3.86 percent a year ago.

According to the government data released Monday, deflation in food articles stood at 0.07 per cent in December, against 3.31 per cent in November.

WPI December data was lower than a provisional 4.64% rise in November, and below a 4.42% increase forecast by economists. Fuel and light inflation was 4.54 per cent in December, down from 7.39 per cent in November on back of reduction in prices of petrol and diesel.

Individually, in petrol and diesel inflation was 1.57 per cent and 8.61 per cent, respectively, and for liquified petroleum gas (LPG) it was 6.87 per cent during December.

Retail inflation declined to an 18-month low of 2.19 per cent in December 2018 mainly on account of sliding prices of fruits, vegetables and fuel. Onion witnessed deflation of 63.83 per cent in December, compared to 47.60 per cent in November.

The Reserve Bank of India's Monetary Policy Committee, which mainly monitors retail inflation data and kept interest rates unchanged at a meeting last month, will have leeway to soften its monetary stance at its February 7 meeting, economists say. The easing price pressures, together with moderating growth, may prompt a rethink on interest rates when the Monetary Policy Committee meets next month.

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