The Hindustan Express
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Food Price Increase Drives India’s Retail Inflation to a Three-Month High, Say Experts

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<p>November had the sharpest rate of retail inflation growth in India in three months, mostly as a result of a rise in food costs. In November, the Consumer Price Index, or retail inflation, was 5.55%. September’s consumer price index (CPI) was 5.02 percent, while October’s CPI was 4.87 percent.</p>
<p><img decoding=”async” class=”alignnone wp-image-307366″ src=”https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-food-price-increase-drives-indias-retail-inflation-to-a-three-month-high-say-exper-1.jpg” alt=”theindiaprint.com food price increase drives indias retail inflation to a three month high say exper 1″ width=”1199″ height=”675″ title=”Food Price Increase Drives India's Retail Inflation to a Three-Month High, Say Experts 6″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-food-price-increase-drives-indias-retail-inflation-to-a-three-month-high-say-exper-1.jpg 549w, https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-food-price-increase-drives-indias-retail-inflation-to-a-three-month-high-say-exper-1-390×220.jpg 390w, https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-food-price-increase-drives-indias-retail-inflation-to-a-three-month-high-say-exper-1-150×84.jpg 150w” sizes=”(max-width: 1199px) 100vw, 1199px” /></p>
<p>While retail inflation in India is over the desired 4 percent scenario, it is still within the RBI’s comfortable range of 2 to 6 percent.</p>
<p>Food inflation, which makes up about half of the total consumer price basket, was 7.0% in November as opposed to 6.1% the month before.</p>
<p>In November, the prices of vegetables increased by 17.7% and grains by 10.27% year over year. According to Ministry of Statistics and Program Implementation official figures, prices for fruits increased by 10.95% last month, spices by 21.55%, and pulses by 20.23%.</p>
<p>The increase in month-over-month retail inflation follows the RBI’s announcement that it has flagged concerns about the inflation outlook and kept the repo rate unchanged for the fifth consecutive month.</p>
<p>With the exception of the recent pauses, the RBI has increased the repo rate by a total of 250 basis points since May 2022 in an effort to combat inflation. One tool of monetary policy that usually serves to reduce demand in the economy and lower the inflation rate is raising interest rates.</p>
<p>Here are a few quotes from analysts and specialists on the November retail inflation figures:</p>
<p>Chief Economist Dharmakirti Joshi of CRISIL: The Monetary Policy Committee’s (MPC) long-term objective of 4% for inflation is still above, so we anticipate that the Reserve Bank of India (RBI) would keep a careful eye on it. In our base scenario, we anticipate that the RBI will maintain current interest rates for the duration of this fiscal year and that CPI inflation would average 5.5%.</p>
<p>It is anticipated that an unfavorable base will further drive CPI inflation up to 5.8–6% in December. Nonetheless, by the end of the fiscal year, the headline inflation rate may drop to 5.1% due to the entry of new crops into the market between January and March. With risks skewed to the upside, we project inflation to average 5.4% for the whole fiscal year.</p>
<p>In the next years, consumer headline inflation will rise, but food prices will remain unstable. The RBI is able to maintain the repo rate at its current level for the time being since, overall, inflation has decreased.November had the sharpest rate of retail inflation growth in India in three months, mostly as a result of a rise in food costs. In November, the Consumer Price Index, or retail inflation, was 5.55%. September’s consumer price index (CPI) was 5.02 percent, while October’s CPI was 4.87 percent.</p>
<p>While retail inflation in India is over the desired 4 percent scenario, it is still within the RBI’s comfortable range of 2 to 6 percent.</p>
<p>Food inflation, which makes up about half of the total consumer price basket, was 7.0% in November as opposed to 6.1% the month before.</p>
<p>In November, the prices of vegetables increased by 17.7% and grains by 10.27% year over year. According to Ministry of Statistics and Program Implementation official figures, prices for fruits increased by 10.95% last month, spices by 21.55%, and pulses by 20.23%.</p>
<p>The increase in month-over-month retail inflation follows the RBI’s announcement that it has flagged concerns about the inflation outlook and kept the repo rate unchanged for the fifth consecutive month.</p>
<p>With the exception of the recent pauses, the RBI has increased the repo rate by a total of 250 basis points since May 2022 in an effort to combat inflation. One tool of monetary policy that usually serves to reduce demand in the economy and lower the inflation rate is raising interest rates.</p>
<p>Here are a few quotes from analysts and specialists on the November retail inflation figures:</p>
<p>Chief Economist Dharmakirti Joshi of CRISIL: The Monetary Policy Committee’s (MPC) long-term objective of 4% for inflation is still above, so we anticipate that the Reserve Bank of India (RBI) would keep a careful eye on it. In our base scenario, we anticipate that the RBI will maintain current interest rates for the duration of this fiscal year and that CPI inflation would average 5.5%.</p>
<p>It is anticipated that an unfavorable base will further drive CPI inflation up to 5.8–6% in December. Nonetheless, by the end of the fiscal year, the headline inflation rate may drop to 5.1% due to the entry of new crops into the market between January and March. With risks skewed to the upside, we project inflation to average 5.4% for the whole fiscal year.</p>
<p>In the next years, consumer headline inflation will rise, but food prices will remain unstable. The RBI is able to maintain the repo rate at its current level for the time being since, overall, inflation has decreased.</p>


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