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India inflation rate lowest since November 2014

Staff Writer |
Consumer prices in India increased 3.41% year-on-year in December of 2016, following a 3.63% rise in November.

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It is the lowest inflation rate since November of 2014 as food prices cooled. The slowdown in inflation intensified in the last two months of 2016 after a demonetization campaign slumped currency in circulation, hurting consumption.

Year-on-year, cost of food and beverages rose 1.98% (2.56% in November), provisional estimates showed. The food index alone increased by 1.37% compared to 2.11% in the previous month.

Prices increased less for sugar (+21.06% from +22.4% in November) and fell for pulses (-1.57% from +0.23%) and vegetables (-14.59% from -10.29%) while cost of fruit rose slightly more (4.74% from 4.6%).

Inflation also eased for clothing and footwear (4.88% from 4.98%) and housing (4.98% from 5.04%) but accelerated for fuel and light (3.77% from 2.8%).

The corresponding provisional inflation rates for rural and urban areas are 3.83% and 2.9% (4.13% and 3.13% respectively in November).

A year ago, the inflation rate was higher at 5.61%. On a monthly basis, consumer prices fell 0.61%.

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