Retail inflation figures have been released, which have brought some relief as compared to October. Retail inflation rate has come down to 5.48% in November, while in October it was 6.21%, which was more than the limit set by the Reserve Bank. These figures have been given by the Ministry of Statistics and Program Implementation.
Decline in Food Inflation is the Main Reason
The main reason for the decline in inflation is believed to be the softening of prices of food items, especially vegetables. According to the Consumer Price Index (CPI) data released by the National Statistical Office (NSO), food inflation fell to 9.04% in November.
It was 10.87% in October and 8.70% in November 2023. The NSO reported a significant decline in the inflation rates of vegetables, pulses, sugar and sweets, fruits, eggs, milk, spices, transport and personal care products in November 2024.
CPI Inflation Increased During July-August
The overall CPI-based inflation increased from an average of 3.6% during July-August to 5.5% in September and 6.2% in October 2024, the highest since September 2023.
In November, the food inflation rate provided some relief, dropping from 10.47% in October. After rising by 6.94% in October, the price of cereals increased by 6.88% in November. The inflation rate for pulses was 7.43% in November, down from 9.81% in the previous month.
RBI Had Increased the Cash Reserve Ratio
In monetary policy committee decisions earlier this month, the RBI kept interest rates unchanged but lowered the cash reserve ratio for banks to support growth. The recent fall in vegetable prices is attributed to favourable monsoon rains, which led to a bumper summer harvest.
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