Economy

In November, rising vegetable prices pushed retail inflation to 4.91 %

According to figures provided by the National Statistics Office (NSO) on Monday, retail inflation in India, as measured by the Consumer Price Index (CPI), was 4.91 percent in November 2021, down from 6.93 percent the previous year.

CPI inflation was projected to be 5.05 percent in November, according to a poll. CPI-based inflation was 4.35 percent in September 2021, and 4.48 percent in October 2021.

rising vegetable prices pushed retail inflation to 4.91 %

Food inflation jumped to 1.87 percent in November, up from 0.85 percent the previous month, due to an increase in vegetable costs. Clothing and footwear inflation increased to 7.94 percent in November, up from 7.39 percent in October.

Housing inflation was 3.66 percent in November, up from 3.54 percent the month before. In November, fuel and light inflation was 13.35%, down from 14.35% in October.

The Reserve Bank of India (RBI) held the key interest rate steady in its monetary policy review in December. It focuses heavily on the CPI when establishing its bi-monthly monetary policy.

With 5.1 percent in the third quarter and 5.7 percent in the fourth quarter, the RBI forecasts CPI inflation of 5.3 percent in 2021-22, with risks generally balanced. Inflation is anticipated to be 5% in Q1 2022-23, according to the CPI.

“I’m shocked by the 4.91 percent figure; we were expecting a little more than 5%,” said DK Joshi, CRISIL’s senior director and chief economist. “However, this is consistent with the findings of the RBI poll, thus I expect inflation to average 5.3 percent for the year.”

“At 5.3 percent, we were expecting significantly higher inflation, so this is a welcome surprise,” said Abhishek Upadhyay, senior economist at ICICI Sec PD. “It looks that the sequential growth in the vegetable index was lower than expected; we had expected a 12 percent increase and it came in at 7%.”

“We were expecting 6.1 percent core inflation, and that’s where it is,” said Upasna Bhardwaj, senior economist at Kotak Mahindra Bank. “The fact that core inflation is anticipated to stay high and sticky in the future will be a painful point.”

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