India’s retail inflation climbed to a 4-month high of 5.69% in December 2023 while industrial production slipped to an eight-month low in November, official data released separately on Friday showed.

The inflation based on Consumer Price Index (CPI) was at 5.72% a year ago and 5.55% in November 2023. Inflation had touched a high of 6.83% in August 2023.

The inflation in December was mainly due to higher food prices including vegetables, pulses and spices, data released by the National Statistical Office (NSO) showed. While retail inflation in the food basket was at 9.53%, it was 8.7% a month ago and 4.9% a year ago.

The Reserve Bank of India (RBI) expects average CPI inflation to fall to 5.2% in the first quarter of 2024. For the October-December 2023 period, the RBI’s forecast of 5.6% has been undershot by 20 basis points.

Factory output, as measured by the Index of Industrial Production (IIP), slipped to a low of 2.4% in November versus 11.6% a month ago and 7.6% a year ago. IIP was affected due to a high-base effect and slower growth in manufacturing, mining and capital goods output. 

The Reserve Bank of India (RBI) has the target of fixing retail inflation at 4%, with a margin of 2% on either side.