Despite the slowing pace of growth in prices, the Consumer Price Index-based rate of retail inflation stayed above the RBI’s 4% tolerance level. Retail inflation rose to 5.48% last month, a slower pace of increase compared to 6.21% in October, data from the Ministry of Statistics and Programme Implementation showed on Thursday.
Despite the slowing pace of growth in prices, the Consumer Price Index-based rate of retail inflation stayed above the Reserve Bank of India’s 4% tolerance level, with two percentage points of deviation on either side.
Prices of food, which have been the main source of high inflation for consecutive quarters, continued to be elevated at 9.04%. This food-price print in November was however lower than October’s 10.47%. Cereal prices went up by 6.88% after climbing 6.94% in October. Inflation in pulses stood at 7.43% against 9.81% last month. Most analysts had expected India’s retail prices to have decline slightly in November on the back of improving food supplies.
Sticky food inflation, which have knocked household budgets, has been a key concern of the Reserve Bank of India. The Reserve Bank of India (RBI) left its benchmark interest rate unchanged at 6.5% in this year’s last meeting of its monetary policy committee despite a dip in economic growth, citing continued risks from inflation.
Achieving the right balance between inflation and growth, a key tradeoff for all economies, is “the most important task for the Reserve Bank of India”, outgoing Reserve Bank governor Shaktikanta Das had said on Tuesday in his last official comments.
