Retail inflation hits 3-yr low of 3.41% in December owing to weak demand

New Delhi: Retail inflation eased further to nearly 3-year low of 3.41 percent in December, reflecting weak demand as consumers grappled with cash crunch following demonetisation.

The decline in retail inflation has been mainly on account of falling prices of vegetables and pulses.

This is the lowest level at least since January 2014.

 Retail inflation hits 3-yr low of 3.41% in December owing to weak demand


The Consumer Price Index (CPI)-based inflation stood at 3.63 percent in November 2016, as per the data released by the Ministry of Statistics and Programme Implementation.

A year ago, in December 2015, retail inflation was at 5.61 percent.

Inflation in vegetables category slipped further in the negative territory to (-)14.59 percent, as against 10.29 percent in November.

Likewise, prices of pulses and products also slipped further in negative territory at (-)1.57 in December.

However, inflation in fruits came in at 4.74 percent, slightly up from November's 4.60 percent. Cereals and products at 5.25 percent too showed a rise in inflation print during the month against 4.86 percent in November.

Protein rich meat and fish had inflation print of 4.79 percent in December, as against 5.83 percent in November. Egg prices witnessed 6.41 percent rise, as against 8.55 percent in the previous month.

Prime Minister Narendra Modi's surprise announcement on November 8 to scrap Rs 500 and Rs 1,000 notes, nearly 86 percent of the total cash in circulation, resulting in lower consumer demand.

Overall, the Consumer Food Price Index was down at 1.37 percent in December compared with 2.11 percent in November.

The CPI-based inflation in fuel and light segment was at 3.77 percent in December as against 2.80 percent a month ago.

Rural retail inflation stood at 3.83 percent in December compared with 4.13 percent in November. For urban sector, it was recorded at 2.90 percent as against 3.05 percent in the previous month.

Updated Date: Jan 12, 2017 18:36:08 IST