Retail inflation rose to 6.93 per cent in November on lower prices of foodgrains, fruits and milk. However, it is still above the satisfactory level of the Reserve Bank of India (RBI). Retail inflation, as measured by the Consumer Price Index (CPI), was 7.61 per cent in October and 7.27 per cent a month earlier.
According to the National Bureau of Statistics (NSO), food inflation eased to 9.43 per cent in November from 11 per cent in the previous month. The category of cereals and their products declined to 2.32 per cent in November from 3.39 per cent in the previous month.
Inflation in meat and fish was 16.37 per cent. It was 18.7 per cent in the previous month. Inflation in vegetables eased to 15.63 per cent in November from 22.51 per cent in the previous month. Inflation in fruits and milk and its products has also come down compared to October.
Potatoes rose 115.12 per cent to 9-month high in November
Inflation in the fuel and light sector rose to 1.9 per cent in November from 2.28 per cent in the previous month. The RBI mainly looks at retail inflation when deciding on policy rates. With a two per cent rise, the government has set a target of keeping inflation at one per cent.
The Reserve Bank did not change policy rates in its credit policy review this month, given the high inflation rate. On inflation, Sunil Kumar Sinha, chief economist at India Ratings and Research, said retail inflation was still above the RBI’s satisfactory level.
He said that although headline inflation (excluding food and fuel) has remained almost stable since May 2020, it has remained at 79.79 per cent. Is between percent. According to India Ratings and Research, retail inflation is expected to fall to 5.5 to 6 per cent in the fourth quarter due to lower food prices.
Peel Works, a B2B (among traders) grocery business, said retail inflation was lower in November. This is the main reason for cheap food. “We expect inflationary pressures to ease in the fourth quarter of the current fiscal,” he said. This has left room for the Reserve Bank to maintain a silent role, which will keep demand on track again.
According to NSO data, retail inflation in November was 7.2 per cent in rural areas and 6.73 per cent in urban areas. As a result, CPI-based inflation stood at 6.93 per cent. Aditi Nair, chief economist at ICRA, said the overall CPI inflation for November was lower than our estimate.
Retail prices of vegetables benefited from the steady state. This is comforting news but not enough to reduce policy rates. Price data was collected from selected 111 urban markets and 1181 villages. This includes all States / UTs. Staff from NSO’s Regional Operations Unit collected the data individually at selected locations.