The RBI had kept the key policy rate unchanged earlier this month mainly due to high inflation. (Image for representation: Reuters)

Retail inflation measured by Consumer Price Index (CPI) has inched up to 7.59 per cent in January 2020 on account of costlier food items, showed government data on Wednesday.

The retail inflation figure for January came higher than expected and is slightly above the 7.35 per cent recorded in December 2019. Retail inflation, however, remains highest since May 2014.

One of the main drivers behind the rise was food inflation, which remained high in January at 13.63 per cent. In December, it was slightly higher at 14.19 per cent.

It is worth mentioning that the retail or consumer inflation for last month has also come above the RBI's medium-term inflation target. RBI recently decided to keep the key repo rate unchanged due to rising inflation concerns.

The fresh rise in January inflation could also be another setback to growth as RBI may pause rate cuts for a longer period, feel economists.

Meanwhile, the country's industrial output, measured by Index of Industrial Production (IIP) also declined by 0.3 per cent in December due to a decline in manufacturing output, showed government data.

Data from the National Statistical Office (NSO) showed that manufacturing sector output for the month of December decline by 1.2 per cent in comparison to a growth of 2.9 per cent in the corresponding period a year ago.

Electricity generation also dipped slightly by 0.1 per cent while the mining sector observed an output growth of 5.4 per cent.

The fresh retail inflation and industrial output data is a dual blow to the economy, which is already going through a slowdown due to low demand.