India’s retail inflation eased in November to 6.93% after rising above 7% for two straight months, government data released on Monday showed. The retail inflation declined due to lower rise in food prices.
However, it continued to be above the comfort level of the Reserve Bank of India, meaning the central bank is likely to leave policy rates on hold to support the economy. The government had mandated that retail inflation be kept within a 4% range, with a 2% margin on each side.
Retail inflation based on the Consumer Price Index stood at 7.61% in October, the highest rise since May 2014.
Inflation in food and beverages dropped to 8.76% in November, compared to 10.16% in the previous month, data showed. Vegetable inflation fell to 15.63% in November from 22.5% in October. Inflation in personal care eased marginally to 11.97% in November compared to 12.07% in October. The inflation in pulses category was at 17.91% compared to 18.34% in October.
The annual wholesale prices-based inflation rose 1.55% in November, separate data released by the government earlier on Monday showed. The uptick came on the back of a sharp spike in non-food articles, which rose from 2.85% in October, to 8.43% in November. However, wholesale prices for two other crucial commodities, food articles (6.37% in October to 3.94% in November) and crude petroleum and natural gas (-13.04% in October to -25.70% in November), witnessed significant dips.
On December 4, the RBI’s monetary policy committee left repo rates unchanged at 4% and said they expected the economy to contract 7.5% in the current financial year through March 2021.