Table of Contents
CURRENT AFFAIR
- According to the data released by Ministry of Statistics and Programme Implementation on January 13, 2020, the food inflation increased to 14.12% in December 2019 as compared to 10.01% in November 2019.
- The CPI (consumer Price Index) rose to 7.35% as compared to 5.54% the previous month.
- The inflation was increase was mainly due to the price of vegetables.
HIGHLIGHTS
- In December 2018, the food inflation was -2.65%.
- Vegetable inflation in urban areas touched 75% and at the country sides it was at 53%.
- Onion inflation doubled as compared to the previous
- It was 128% in November and it increased to 328% in
CPI Inflation
- The CPI measures the average change in prices over time that consumers pay for a basket of goods and services, commonly known as inflation.
- It attempts to quantify the aggregate price level in an economy and thus measure the purchasing power of a country’s unit of currency.
CORE INFLATION
- Core inflation is the change in the costs of goods and services but does not include those from the food and energy sectors.
- This measure of inflation excludes these items because their prices are much more
OTHER FACTORS
- The soaring crude oil prices due to the increasing tensions between Iran and US.
- In the coming Budget, GoI is expected to increase its spending largely on infrastructure.
- Tax Cuts
MONETARY POLICY
- For the first time, the inflation has breached RBI’s target inflation of 4% (±2%).
- Predicting the situation, RBI had kept its policy interest rates on hold in its policy review of December
Implications
- Increase in interest rates that will increase cost of borrowing
- Slow-down in investment and economic growth
Latest Burning Issues | Free PDF
WhatsApp