Retail inflation in India, measured by the Consumer Price Index (CPI), likely reached a three-month high of 5.7% in November from 4.87% in October due to a spike in vegetable costs.
Retail inflation stood at 5.88% in November 2022. On the other hand, the poll’s projections varied greatly, ranging from 5.30 to 6.92 percent. On the other hand, core inflation is predicted to stay at roughly 4.2%, the same level as it was in October.
The aggregate CPI index probably increased by 0.7% month over month, or at its fastest rate in the last four months, to 5.7%. Furthermore, the 0.7% growth is greater than the 0.5% average increase the index as a whole has had over the last ten years.
According to data from the Department of Consumer Affairs, tomato prices increased by 34.7% and onion prices increased by 58.3% month over month in November. Over the month, there was a 2.2% consecutive increase in potato prices.
The Monetary Policy Committee (MPC) of the Reserve Bank of India made a statement last week indicating that a rise in headline inflation in November and December is anticipated due to adverse base effects and uncertainty surrounding food prices.
The MPC recommended that “kharif harvest arrivals, rabi sowing progress, and El Nino weather conditions be monitored.” These pressures on food prices may be mitigated by the government’s proactive supply-side initiatives, adequate buffer stockpiles of cereals, and a notable slowdown in global food prices.
Nonetheless, the RBI maintained its 5.4% and 5.6% inflation projections for the third quarter and the entire year (FY24), respectively. The MPC noted in its statement that core disinflation has been consistent, demonstrating the effects of previous monetary policy measures.
