Retail inflation shoots up to over 3-year high of 5.54% in November on costlier food prices
Retail inflation rose significantly to over three-year high of 5.54 percent in November, mainly on account of higher food prices
The inflation based on Consumer Price Index (CPI) was 4.62 percent in October, and 2.33 percent in November 2018
The previous high of CPI was 6.07 in July 2016
Vegetable inflation also increased 35.99 percent in November compared with 26.10 percent in October
Retail inflation rose significantly to over three-year high of 5.54 percent in November, due to costlier food products like vegetables, pulses and protein-rich items.
The inflation based on Consumer Price Index (CPI) was 4.62 percent in October, and 2.33 percent in November 2018.
#BreakingNews | November CPI at 5.54% Vs 4.62% (MoM) pic.twitter.com/a3RF4Jh5jf
— CNBC-TV18 (@CNBCTV18Live) December 12, 2019
As per the data released by the National Statistical Office (NSO), the inflation in the food rose to 10.01 percent. This compares with 7.89 percent October and (-) 2.61 percent in the year ago-month.
The previous high of CPI was 6.07 in July 2016.
Vegetable inflation also increased 35.99 percent in November compared with 26.10 percent in October.
Likewise, the prices of cereals, meat and fish, eggs grew at faster pace of 3.71 percent, 9.38 percent and 6.20 percent, respectively. For pulses and related products, retail inflation rose to 13.94 percent.
However, the prices of fuel and light category continued to witness downward move at (-) 1.93 percent as against (-) 2.02 percent a month earlier, showed the data.
The Reserve Bank of India has been mandated by the government to contain inflation in the range of 4 percent, with a margin of 2 percent on either side.
ICRA Principal Economist Aditi Nayar said that moderation in vegetable prices should douse food inflation to a large extent in early 2020, and healthy groundwater and reservoir levels bode well for rabi output and yields of various cereals.
However, the year-on-year decline in the area sown under rabi pulses and oilseeds poses a concern, given the high inflation being recorded by some of these items.
"ICRA expects the CPI inflation to spike further to 5.8-6 percent in December 2019, close to the upper threshold of the MPC's medium-term target, driven by the recent revision in telecom tariffs. As a result, we expect the MPC (monetary policy committee of RBI) to remain on hold in its February 2020 policy review," she said.
India's November inflation has surged to 40-month high mainly due to an increase in food prices, said Rahul Gupta, Head of Research - Currency, Emkay Global Financial Services
"At this month's policy, RBI refrained from cutting rates due to uptick in CPI despite a slow growth. If inflation continues to rise further then RBI may continue to maintain a pause at the February policy," he said.
—With inputs from agencies
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