Deflationary trend eased in December with WPI inflation moving up to (-)0.73 per cent as food articles, mainly vegetables, turned costlier.
The Wholesale Price Index-based inflation has been rising for the last four months and was (-)1.99 per cent in November.
In December 2014, it was (-)0.50 per cent. This is the 14th straight month since November 2014 when the wholesale inflation has remained in the negative zone.
Food inflation, however, shot up to 8.17 per cent in December as against 5.20 per cent in the previous month. Inflation in pulses and onion stood at 55.64 per cent and 25.98 per cent, respectively.
The rate of price rise in case of vegetables was 20.56 per cent during December and for fruits it was 0.76 per cent.
The rate of price rise in potato was (-) 34.99 per cent while in egg, meat and fish it was 5.03 per cent.
Inflation in fuel and power segment was (-) 9.15 per cent and for manufactured products it was (-) 1.36 per cent in December. Inflation for October has been revised to (-) 3.70 per cent from the provisional estimate of (-) 3.81 per cent.
The Reserve Bank may face pressure to reduce the key lending rate further as industrial production contracted by 3.2 per cent in November, its sharpest decline in four years.
Governor Raghuram Rajan had on Wednesday said the bank will carefully look into the latest data on industrial production, and come out with a reasoned response.
Besides IIP, the central bank also looks into retail inflation data while firming up its monetary policy stance. Retail inflation has been rising for five straight months and stood at 5.61 per cent in December. RBI's next bimonthly policy review will be unveiled on February 2.