India’s Consumer Price Index (CPI)-based inflation for November 2024 declined to 5.48% compared to 6.21% in October, slightly below the estimated 5.50%. The easing inflation is attributed to a decrease in vegetable prices and improved Rabi crop sowing, though food inflation remains a critical concern.
Key Highlights:
- CPI Food Inflation: Stood at 9.04% in November, higher than the expected 8.5%. While lower than October’s 10.87%, it underscores the ongoing volatility in food prices, which continues to strain household budgets, particularly for staples like vegetables, pulses, and oils.
- CPI Rural Inflation: Decreased to 5.95% from 6.68% in October.
- CPI Urban Inflation: Declined to 4.83% compared to 5.62% in October.
- Core Inflation: Excluding food and fuel, core inflation remained relatively stable at around 3.7%, signaling that inflationary pressures outside the food sector are not a major concern.
Despite the moderation in the overall CPI, high food inflation poses significant challenges to price stability. This could impact the Reserve Bank of India’s future policy decisions, with analysts suggesting that persistent food inflation might delay achieving the RBI’s medium-term inflation target of 4%.
Policymakers will closely monitor price trends in food and essential goods, as these remain key drivers of inflation.
