The National Statistical Office (NSO) on Wednesday said that the index of industrial production (IIP) shrank 0.30% in December from a 1.8% expansion a month ago, while retail inflation accelerated to 7.59% in January from 7.35% in the previous month.

The contraction in IIP was led by manufacturing (-1.2%) and electricity (-0.3%) sectors, while mining (5.4%) registered robust growth on the back of improved performance of Coal India Ltd.

Among use-based items, both consumer durables (-6.7%) and consumer non-durables (-3.7%) registered sharp contraction, while capital goods (-18.2%), which signifies investment demand in the economy, shrank for the 12th month in a row.

According to government data, Consumer Price Index (CPI) inflation stood at a whopping 7.59% last month, slightly higher than the previous high of 7.35% that was recorded in December 2019.

The primary culprits include vegetable prices (50.19% in January) as well as other key food items such as meat, milk, pulses and cereals. Outside the food and beverages category, inflation in ‘transport and communication’ rose to 6.08% from 4.77% in December.

The items that registered the steepest decline in December include printed circuit boards (-69.7%), separators including decanter centrifuge (-63.3%), bars and rods of alloy and stainless steel (-54%) and electric and non-electric meters (-54%).