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 year before, according to data released by the National Statistics Office (NSO) on Monday.
According to a poll, CPI inflation in November was expected to be 5.05 percent. In September 2021, CPI-based inflation was 4.35 percent, and in October 2021, it was 4.48 percent.
With a rise in vegetable prices, food inflation increased to 1.87 percent in November from 0.85 percent the previous month. In November, clothing and footwear inflation was 7.94%, up from 7.39% in October.
In November of this year, housing inflation was 3.66 percent, up from 3.54 percent the month before. Fuel and light inflation was 13.35 percent in November, down from 14.35 percent in October.
In its monetary policy review in December, the Reserve Bank of India (RBI) kept the key interest rate unchanged. When determining its bi-monthly monetary policy, it focuses primarily on the CPI.
The RBI forecasts CPI inflation of 5.3 percent in 2021-22, with risks broadly balanced, with 5.1 percent in the third quarter and 5.7 percent in the fourth quarter. CPI inflation is expected to be 5% in Q1 2022-23.
“I am somewhat surprised by the 4.91 percent number; we were expecting a tad above 5 percent,” said DK Joshi, senior director and chief economist at CRISIL. “However, this is in line with what the RBI survey was showing, so I think inflation will average 5.3 percent for the year.”
“We were expecting inflation to be much higher at 5.3 percent, so this is a pleasant surprise,” said Abhishek Upadhyay, senior economist at ICICI Sec PD. “It appears that the sequential increase in the vegetable index has been lower than what we anticipated; we had assumed a 12 percent jump and it has come in at 7 percent.”
“The core inflation we were expecting 6.1 percent and that is where it is,” Upasna Bhardwaj, senior economist at Kotak Mahindra Bank, said. “The fact that core inflation is expected to remain elevated and sticky will continue to be a sore point going forward.”