2024/12/18 15:21 pm
Inflation falters in the latest CPI data of November released by the Ministry of Statistics and Program Implementation National Statistics Office on 12th December 2024. The notable decrease was noticed following the dip in prices of vegetables and foodgrains, pulling the (CPI) consumer price inflation to 5.48% lower than the upper tolerance limit of RBI at 6%. The Inflation Index for food prices remains high at 9.04% but lowered from 10.87% in October.
Earlier in the Monetary Policy Committee (MPC) meeting RBI decided to keep the repo rate unchanged despite the deceleration of the growth rate and the inflation surging to 6.2% above the tolerance limit.
Edible oil prices soared to 30 months high of 13.3%. This is due to the global supply chain disruption and increased import duties. Inflation declined in Pulses & Products, Sugar & Confectionary, Fruits, Eggs, Milk and Products, Spices, Transport & Communication and Personal care & effect subgroups.
According to the global marketing analytics company CRISIL food prices will ease sequentially. Vegetable prices will moderate with the introduction of Kharif Crops. Vegetable prices will decline more aided by the favourable base owing to the inflated vegetable prices of last year. Vegetable inflation lowered to 29.3% from 42.2% last month mainly because of tomato and onion prices. However, potatoes, leafy vegetables, and brinjals remain high.
Fuel, electricity, and kerosene deflated whereas fire, woodchip and coke inflated. Precious metals inflation declined leading to a decrease in core inflation from 3.8% to 3.7%. Gold and Silver inflation also witnessed declines in Y-o-Y growth. Transport and Communication driven by vehicles such as cars and two-wheelers also eased contributing to the softer core inflation.
The RBI Governor in his monetary policy statement expressed optimism that manufacturing and services activity will garner greater revenue and push up the non-food inflation. However, the weaker domestic demand and soft global prices are expected to restrict inflation in the current fiscal year.