Retail inflation in Nov eases to 5.48% as food prices moderate

New Delhi: Retail inflation declined in November to 5.48 per cent and came within the Reserve Bank’s comfort zone mainly due to easing food prices, creating headroom for a rate cut at the central bank’s rate-setting panel meeting under new Governor Sanjay Malhotra in February.

The Consumer Price Index (CPI) based headline inflation was at 6.21 per cent in October and 5.55 per cent in November 2023.

“During the month of November, 2024 significant decline in inflation is observed in vegetables, pulses and products, sugar and confectionary, fruits, eggs, milk and products, spices, transport and communication and personal care and effects subgroups,” National Statistics Office (NSO) said in a statement.

According to the CPI data released by the NSO on Thursday, inflation in the food basket reduced to 9.04 per cent in November. It was 10.87 per cent in October and 8.70 per cent in November 2023.

The data revealed that the top five items showing highest year-on-year inflation in November 2024 were garlic (85.14), potato (66.65), cauliflower (47.7), cabbage (43.58) and coconut oil (42.13).

The key items having lowest year-on-year inflation were jeera (-35.04), ginger (-16.96), LPG excluding conveyance (-10.24) and dry chillies (-9.73).

The government has tasked the RBI to ensure that the headline inflation remains at 4 per cent with a margin of 2 per cent on either side. The RBI has maintained a short-term lending rate (repo) at 6.5 per cent since February 2023.

The NSO data also revealed that the CPI inflation rate for rural and urban areas were 5.95 per cent and 4.83 per cent, respectively, in November.

Among states, the highest inflation was recorded in Chhattisgarh (8.39 per cent) and lowest in Delhi (2.65 per cent). It can be observed that after December 2023, inflation rate for both CPI (General) and CFPI were declining, reaching their lowest point in July 2024, it said. “However, from August, 2024 to October 2024, an increasing trend was observed. Thereafter, in November, 2024 inflation again declined. The decline in inflation in November 2024 is mainly due to decline in inflation in the ‘food & beverages’ group,” NSO added.

NSO collects the price data from selected 1,114 urban markets and 1,181 villages. India’s industrial production (IIP) growth slowed to 3.5 per cent year-on-year in October 2024, mainly due to poor performance of mining, power and manufacturing, as per official data released on Thursday. The IIP recorded a growth of 11.9 per cent in October 2023, according to a statement by the Ministry of Statistics & Programme Implementation. However, on a sequential basis, the factory output in October 2024 rose to 3.5 per cent from 3.1 per cent in September and a contraction of 0.1 per cent in August this year. The growth in the factory output, measured in terms of the IIP, in April-October worked out to be 4 per cent against 7 per cent in the year-ago period, the data showed. As per the data, the mining output growth decelerated to 0.9 per cent in October from 13.1 per cent expansion in the year-ago month.

The manufacturing sector’s growth decelerated to 4.1 per cent in October from 10.6 per cent a year ago.

Similarly, in power generation, the output growth slowed sharply to 2 per cent from a 20.4 per cent growth a year ago. As per use-based classification, the capital goods segment growth decelerated to 3.1 per cent in October 2024 from 21.7 per cent in the year-ago period. In October this year, consumer non-durables output growth slowed to 2.7 per cent compared to a 9.3 per cent growth in October 2023.

Consumer durable goods production grew by 5.9 per cent during the reporting month against a 15.9 per cent expansion in October 2023.

According to the data, infrastructure/construction goods reported a growth of 4 per cent in October 2024, down from a 12.6 per cent expansion in the year-ago period. The data also showed that the output of primary goods logged a 2.6 per cent growth in October this year against 11.4 per cent a year earlier. The expansion in the intermediate goods segment was 3.7 per cent in the month under review, lower than the 9.5 per cent a year ago.