Consumer Prices (Dec.) & Industrial Production (Nov.)

The rise in consumer price inflation in December was due in large part to price falls a year ago rather than any increases recently. The more significant point is that inflation remains subdued by past standards and well within the RBI’s near term targets. Policymakers are likely to put less emphasis on today’s industrial production data, which show a pick-up in activity in November. Overall, the case for policy loosening remains intact.