NEW DELHI: Consumer inflation for the month of November fell to an over one-year low of 2.33 per cent, driven by softening food and vegetable prices, while industrial growth hit a one-year high of 8.1 per cent in October. According to data released by the ministry of statistics and programme implementation, the consumer food price index was at -2.61 per cent as against -0.86 per cent earlier. According to the CSO data, vegetable inflation for October is at -15.59 per cent compared to -8.06 per cent earlier.
Housing inflation for the month of November is 5.99 per cent compared to 6.55 per cent in October.
“The sharp easing in the headline CPI inflation reflects a combination of favourable factors such as the correction in retail fuel prices, discomfiting factors such as a deeper disinflation in food prices, and base effects related to the waning impact of the HRA revision for central government employees,” said Aditi Nayar, Principal Economist, ICRA.
This is the fourth straight month where retail inflation has been below the RBI’s medium-term target of 4 per cent and analysts say that there is a significant likelihood of a change in the monetary policy stance back to ‘neutral’ from ‘calibrated tightening’ in the next monetary policy.
“As I have pointed out repeatedly over the last year, real rates are just too high. Indian businesses now borrow at real rates of 800-1000 bps. This not only affects profitability but also financial stability, and adds to supply-side inflation in the long run,” Principal Economic Advisor Sanjeev Sanyal tweeted.