Owing to higher food prices, retail inflation rose sharply to 7.35% in Decemer 2019 from 5.54% in November, according to government data. It was 2.11% in December 2018.

Vegetables inflation in December 2019 surged to 60.5% as against 36% in November. As per the government data, the food inflation rose to 14.12% in December as against (-) 2.65% in the same month of 2018. It was 10.01% in November 2019.

The central government has mandated the Reserve Bank of India to keep inflation in the range of 4% with a margin of 2% on the either side.

The median forecast in the Reuters poll of nearly 50 economists predicted India's annual consumer inflation rose to 6.2% in December from November's 5.54%.

Citing inflation concerns, the RBI kept interest rates unchanged in December following five cuts totaling 135 basis points earlier in the year.

The central bank will make its next interest rate decision on February 6, days after Finance Minister Nirmala Sitharaman presents the Union Budget.

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