Consumer Price Inflation Drops Sharply In Nov To 5.88%

Consumer price based inflation fell to a 11-month low of 5.88 per cent in Nov, 2022 on an annual basis from 6.77 per cent in October, 2022. The number is below the RBI's tolerance band of 2-6 per cent after 10 months.

"The CPI data print is a pleasant surprise, at 5.88% it has slipped below the RBI's mandated range after 10 months. Dip in food and vegetable prices are the primary reasons for the softness in inflation. The core inflation remains elevated though. The critical thing to watch out for will be the durability of this trend for the RBI to soften its stance in the fight against inflation," says Nish Bhatt, Founder & CEO, Millwood Kane International.

According to Vivek Rathi, Director-Research, Knight Frank India, softening of headline inflation to under 6% in Nov'22 was supported by a moderation in some of the food components such as vegetables, which is mostly a seasonal movement. "Fuel prices have remained stable limiting upward pressure in inflation. However, rupee depreciation which has made imports expensive along with demand revival added to inflationary pressure. The inflation print within the RBI upper tolerance range of 6% will provide comfort in the policy setting and interest rate action framework in coming months comforting both households and corporate borrowers," he stated.