India's retail inflation rate is now at a 5-year high in December 2019, it reached 7.35% breaching the upper-limit of 6% set by the RBI.
Inflation is the constant rise in the general level of prices where a unit of currency buys less than it did in prior periods. It indicates a decrease in the purchasing power of a nation’s currency. A shortage of onions drove the surge in December 2019.
Overall, food inflation rose to 14.12% in December as against a negative rate of -2.65% in the same month of the previous year. It was also significantly higher than the 10.01% recorded in November 2019. Along with vegetables, high prices of pulses, meat and fish also contributed to last month’s spike. The inflation in ‘pulses and products’ was recorded at 15.44%, while for ‘meat and fish’ it was nearly 10%.
The last time retail inflation touched 7.39% was in July 2014, just after Prime Minister Narendra Modi began his first term in office.
