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Retail inflation softens to 18-month low of 2.19% in December

India's retail inflation based on Consumer Price Index (CPI) continued its easing trend for third straight month in December mainly on account of sliding prices of fruits, vegetables and fuel. CPI softened to an 18-month low of 2.19% in December 2018 as compared to 2.33% in November and 5.21% in December 2017. The inflation has remained below the RBI's medium-term target of 4% for the fifth straight month and it fell to its lowest level since June 2017 of 1.46%. Besides, food inflation remained in the negative zone at 2.51% compared to (-) 2.61% in the November.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the CPI (Rural, Urban, Combined) on Base2012=100 for December 2018, stood at 1.65%, 2.91% and 2.19% respectively, compared to 5.27%, 5.09% and 5.21%, respectively in December 2017. The index value of CPI for combined stood at 140.2. The data also showed that Consumer Food Price Index (CFPI) for all India Rural and Urban for December 2018 stood at (-) 2.84% and (-) 1.89%, respectively, compared to 5.08% and 4.71%, respectively in December 2017. The index value of CFPI for combined stood at 136.2 for the month of December.

The rate of price rise in vegetables, fruits and protein-rich eggs continued to decline. However, there was a marginal increase in prices of meat, fish, and pulses. Prices of vegetables declined the most, by 16.14%. Prices of sugar and confectionery fell 9.22%, and the cost of pulses and products were 7.13% lower. However, the prices of health-related goods rose 9.02%, while education-related goods were costlier by 8.38%. 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.

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