India's consumer price index climbed in December 2019 to its highest level in more than five years, surpassing the Reserve Bank of India's inflation target for the third consecutive month.
Annual inflation accelerated to 7.35% last month from 5.54% in November 2019, provisional data from the country's National Statistical Office showed. The central bank's medium-term inflation target is 4%, plus or minus 2 percentage points.
The latest reading marks the highest rate since a 7.39% annual increase in consumer prices recorded in July 2014.
"The key takeaway from today's release is that it makes almost certain that the RBI will leave policy rates on hold at its [February] meeting, having done so under more benign inflation circumstances when it last met in December," Capital Economics' Chief Asia Economist Mark Williams said in a note.
The rise in inflation was led by a boost in prices of food and beverages at an annual rate of 12.16%. Housing prices went up 4.30%, while pan, tobacco and intoxicants prices rose 3.37%.
The consumer food price index rose 14.12% annually in December 2019 following a 10.01% increase recorded in the previous month.
India's Ministry of Statistics on Jan. 7 posted projections for the country's economic growth slowing to an 11-year low at 5.0% in fiscal year 2019-20 as the government prepares to unveil its annual budget in February.