India November retail inflation at 6.93% versus 7.61% in October

The inflation data puts monetary policy committee in a difficult situation, with inflation breaching 6 percent three consecutive quarters, growth being low and India entering recession (two consecutive quarters of negative growth)

December 15, 2020 / 01:47 PM IST

India's retail inflation for November was at  6.93 percent against 7.61 percent in October.

Vegetables inflation for November came in at 15.63 percent, oils and fat at 17.86 percent, meat and fish at 16.67 percent, and pulses and products at 16.67 percent.

"The food inflation has expectedly dropped to 8.76 percent on a YoY basis from 10.2 percent in October with a cooling down in the prices of both vegetables and animal protein items. This indicates that the supply challenges have eased somewhat and with a higher base for December 2020, the CPI print is expected to come down further next month," said Suman Chowdhury, chief analytical officer, Acuité Ratings & Research.

Inflation in transport and communication came in at 11.06 percent and that in recreation and amusement came in at 4.57 percent.

CPI inflation has remained in excess of 6 percent, except in March this year.

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The inflation data puts monetary policy committee in a difficult situation, with inflation breaching 6 percent three consecutive quarters, growth being low and India entering recession (two consecutive quarters of negative growth).

The core inflation rate for November was at 5.8 percent, staying unchanged month-on-month.

As for the CPI Combined Food Price Inflation, it was at 9.43 percent in November against 11.07 percent in October.

Earlier in October review, RBI had noted a bumper Rabi crop, moderate rises in minimum support prices for Kharif crops, among others augur well for the inflation outlook.

Meanwhile, the Reserve Bank expects the retail inflation to trend downwards in the second-half of FY 2021 and estimates the CPI to ease to 5.4 percent in the third quarter and 4.5 percent in the fourth quarter.

The retail inflation, which is based on the CPI and is referred to as the rate of increase in retail prices of essential items, is mainly factored by Reserve Bank while deciding on the key interest rates.
Moneycontrol News
first published: Dec 14, 2020 05:33 pm
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