Industrial production grew 2.4% in December as compared to 7.3% in the corresponding period in 2017-'18, according to the data released by Ministry of Statistics and Programme Implementation on Tuesday. Inflation for the "fuel and light" category moderated to 2.20 per cent in January from 4.54 per cent a month ago.
Retail inflation in January is the lowest since June 2017 when it had touched 1.46 per cent. Consumer Food Price Index (CFPI) inflation stood at (-) 2.17 per cent in January as against (-) 2.65 per cent in December.
"Morgan Stanley expects the USA core consumer price index (CPI) to rise 0.2 percent in January, in line with its three-month average, but sees the headline CPI falling for the fourth consecutive month to 1.5 percent from 1.9 percent".
This is the sixth straight month where the inflation has remained below the RBI's medium term target of 4 per cent.
Economists in a Reuters poll predicted retail inflation would edge up to 2.48 percent in January from the downward revised December figure of 2.11 percent.
"We expect headline CPI to retreat to 1.5% thanks to lower gasoline prices", said TD Securities previewing this week's inflation report from the U.S".
Inflation pressures have eased in recent months, following falls in food and crude oil prices. "The latter should underpin a 0.2% m/m print on core CPI, translating to a 2.1% y/y increase vs 2.2% previously".
The prices of vegetables declined 13.32% while prices of sugar and confectionery dropped 8.16%.
India's economy is slowing, hit by reduced growth in consumer spending and in the farm sector.
"Unlike when the cap is lowered, energy firms don't have to automatically raise prices when the cap is lifted".
January inflation missed economists' expectations and the central bank's target of 2 per cent. However, the conundrum of sharp spikes in rural health and education prices still remains and requires watching.
The CPI including owner-occupiers' housing costs (CPIH) - the ONS's preferred measure of inflation - was 1.8 per cent in January, down from 2 per cent in December.