Inflation stays below 1% in November: Five charts explain not everything is turning cheaper

November marks only the second instance in the current inflation cycle where headline inflation has stayed below 1 percent for two straight months.

India’s retail inflation remained below the 1 percent mark for a second consecutive month in November. Headline inflation edged up marginally to 0.7 percent in November from 0.3 percent in October, but some items like eggs, coffee and coconut still witnessed higher prices.

November marks only the second instance in the current inflation cycle where headline inflation has stayed below 1 percent for two straight months.

The biggest driver of this unusually low inflation continues to be food prices. Food inflation remained in negative territory in November, extending a trend seen over recent months as vegetable prices softened and cereal inflation stayed muted. Lower food prices have more than offset price pressures in other components of the consumption basket, keeping overall inflation in check.

That said, underlying price pressures have not disappeared entirely. Core inflation, which excludes food and fuel, remains above 4 percent, indicating that services and manufactured goods are still witnessing relatively firmer price momentum. Items such as jewellery, edible oils, coffee and certain household appliances have seen faster price increases compared with the broader basket, reflecting both global commodity trends and domestic demand conditions.

There are also early signs that prices are starting to inch up on a month-on-month basis. Sequential price increases suggest that the current phase of ultra-low inflation may be close to its trough, even though year-on-year readings remain subdued due to favourable base effects.