Inflation Eases in India: CPI Declines to 5.5% in November

India's CPI inflation is anticipated to drop to 5.5% in November from 6.2% in October, largely due to decreasing food prices. The drop offers relief to policymakers and consumers, aligning with RBI's efforts for economic stability.

Consumer Price Index (CPI) inflation in India is projected to fall to 5.5% year-on-year in November, down from 6.2% in October, a Morgan Stanley report reveals. The anticipated decline is driven by decreasing food prices, alongside a deceleration in core CPI, which covers goods and services excluding food and fuel.

The report states, "We expect CPI inflation to edge downwards to 5.5% in November from 6.2% in October, supported by a moderation in food prices, with core inflation ticking upwards and fuel prices continuing their decline. We foresee this sequential reduction in the index being fueled by contracting food prices and a slowdown in core inflation."

This easing of inflation provides relief for policymakers and consumers, as high food prices have been a significant factor in recent inflation surges. Falling fuel prices further bolster this downward trend, alleviating financial pressure on households and businesses.

The decline is in line with the Reserve Bank of India's (RBI) objectives of maintaining price stability while fostering economic growth. If this trend persists, it could grant the central bank more flexibility in its monetary policy decisions. Previously, another report from the Union Bank of India predicted CPI inflation to drop to 5.4% in November 2024, also citing a seasonal decrease in vegetable prices.

A notable decrease in vegetable prices, which contributed considerably to the CPI spike in October, has been recorded. Vegetable price inflation, after reaching a 42% year-on-year increase in October – the highest since January 2020 – is estimated to have dropped to 27% in November, primarily due to a reduction in tomato prices. (ANI)

(With inputs from agencies.)