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India’s December inflation 13.56% as firms fight rising costs

Reuters . New Delhi
15 Jan 2022 00:00:00 | Update: 15 Jan 2022 00:40:41
India’s December inflation 13.56% as firms fight rising costs

India’s annual wholesale price-based inflation eased marginally in December to 13.56 per cent, but remained in double digits for a ninth successive month, reflecting rising input costs for firms, many of which are steadily passing on costs to consumers.

December’s figure was marginally lower from the previous month’s 14.23 per cent, which was the highest in more than a decade, government data showed on Friday.

Rising input costs for products such as fuel, metals and chemicals have pushed up wholesale prices, a proxy for producers’ prices, in recent months, while headline retail inflation is hovering around 5 per cent, still within the 2 per cent-6 per cent target of Reserve Bank of India (RBI).

The RBI left the benchmark repo rate (INREPO=ECI) unchanged at 4.0 per cent for a ninth consecutive meeting last month as economic growth remains a challenge amid rising Covid-19 cases.

Consumer price-based inflation, the main gauge monitored by the monetary policy committee of RBI, rose to a five-month high of 5.59 per cent in December from the corresponding month last year, from November’s 4.91 per cent, separate data showed on Wednesday.

Analysts fear that rising Omicron cases, central banks’ unwinding of easy liquidity and climbing global crude oil prices could push domestic prices even higher in the next few months before easing in the second half of the year.

On Friday, India reported 264,202 new cases of the coronavirus, taking its total tally to 36.58 million, while the death toll increased to 4,85,350, the federal health ministry said.

Wholesale fuel and power prices in December rose 32.30per cent on the year versus 39.81 per cent in November, while manufactured product prices rose 10.62 per cent, against 11.92 per cent in the prior month.

Wholesale prices of food accelerated at a 6.70 per cent pace, versus 3.06per cent the previous month.