India’s consumer price inflation eases to 5.07% in January

Consumer price inflation in the country, based on the consumer price index (CPI), eased to 5.07 per cent in January, after hitting a 17-month high of 5.12 per cent in December, but still above the 5 per cent level and way above the Reserve Bank of India's (RBI) 4.0 per cent medium-term target.

Consumer price inflation stood at a 15-month high of 5.21 per cent (revised) in December 2017 while it was at a low 3.17 per cent in January 2017

The still high inflation is attributed to hardening prices of essentials and the demand push caused by the government's decision to increase central government employees pay in line with the 7th Pay Commission recommendations.

The rising trend in inflation, however, seems to have supported a pick-up in industrial production, with the index of industrial production rising to 7.1 per cent in December.

The Reserve Bank of India (RBI) maintained a neutral stance in last week's monetary policy review, citing the risk of rising inflation.

The current levels of inflation are far higher than the Reserve Bank of India's (RBI) 4.0 per cent medium-term target.

The rate of food inflation for consumers during January stood at 4.70 per cent against 4.49 per cent in December 2017.

The government is releasing consumer price inflation data since January 2012 based on combined data for rural and urban consumers.

Consumer price inflation for the rural areas stood at 5.21 per cent in January against 5.27 per cent in December 2017 and 3.36 per cent in January 2017.

For the urban areas, the consumer price inflation stood at 4.93 per cent in January against 5.09 per cent in December 2017 and 2.90 per cent in January 2017.

Food price inflation for rural areas stood at 5.05 per cent in January against 5.08 per cent in December 2017 and 1.14 per cent in January 2017.

Food price inflation for urban areas stood at 4.06 per cent in January against 4.71 per cent in December 2017 and -0.31 per cent in January 2017.