India’s retail inflation rises to 0.71% in November on slower fall in food prices

India’s annual retail inflation rose to 0.71 per cent year-on-year in November, up from a record low of 0.25 per cent in October, as the pace of decline in food prices slowed, government data showed on Friday.

A Reuters poll had forecast inflation at 0.7 per cent. The latest print stayed below the Reserve Bank of India’s target range of 2 to 6 per cent for the third straight month.

Food inflation remains in negative but moderates

The Consumer Food Price Index (CFPI) showed food inflation at -3.91 per cent year-on-year. Rural areas recorded -4.05 per cent and urban areas -3.60 per cent. Prices rose across vegetables, eggs, meat and fish, spices, and fuel and light, contributing to the overall uptick in headline inflation.

Rural and urban inflation trends

Rural headline inflation increased to 0.10 per cent from -0.25 per cent in October, while urban headline inflation climbed to 1.40 per cent from 0.88 per cent.

Urban food inflation improved to -3.60 per cent from -5.18 per cent, and rural food inflation eased to -4.05 percent from -4.85 per cent.

Mixed movement across sectors

Housing inflation in urban areas dipped slightly to 2.95 per cent. Education inflation fell to 3.38 per cent, health inflation moderated to 3.60 per cent, and transport and communication inflation eased to 0.88 per cent.
Fuel and light inflation rose to 2.32 per cent from 1.98 per cent in October.

Inflation remains below RBI target band

The rise in November’s retail inflation was largely driven by firmer food and fuel prices. Despite the uptick, inflation remains well below the RBI’s target corridor.