Retail inflation hits 17-month high of 5.21%, IIP grows to grows 8.4%

New Delhi: India`s annual retail inflation accelerated in December to a 17-month high of 5.21 percent, government data showed on Friday, mainly driven by faster rises in prices of food and fuel products.

The CPI-based retail inflation jumped to 5.21 percent in December on annual basis, as compared to 4.88 percent in the preceding month.

An exponential rise in the manufacturing output lifted India`s total factory production by over 8 percent in November from 1.99 percent in October and 5.1 percent during the corresponding period of 2016-17, official data showed on Friday.

As per the IIP data released by the Central Statistics Office (CSO), the acceleration in output was mainly on account of a robust performance by the manufacturing sector.

On a year-on-year basis, the manufacturing sector expanded by 10.2 percent, whereas mining`s output inched-up by 1.1 percent and the sub-index of electricity generation increased by 3.9 percent.

On a year-on-year (YoY) basis, the CPI inflation last month was higher than the 3.41 percent recorded in December 2016.

The Consumer food price index (CFPI) in December stood at 4.96 percent compared to the 4.42 percent of November 2017. The data revealed that eggs, vegetables and fruits became costlier, while inflation moderated in case of cereals and pulses. 

The jump in retail inflation comes a month after the Reserve Bank warning that there may be a spike in prices in the coming months.

The central bank had also raised its inflation projection for the remaining months of the current fiscal while keeping the key interest rate (repo) on hold.