Retail inflation rose to 5.41 per cent in November, testing the Reserve Bank of India’s comfort level, as prices of vegetables, pulses and fruits continued to rise. Retail inflation was 5 per cent in October.
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Consumer inflation rose to a 14 month high in November while wholesale deflation narrowed in the month because of higher food inflation, but the numbers are in line with expectation and the spike is also partly statistical, because of low base of a year ago.
Higher food prices and anticipated higher government salaries because of the implementation of the Seventh Pay Commission are expected to stoke inflation, making it tougher for the RBI to cut interest rates in the coming months.
“The continuous downtrend in WPI seen over the past few months is a positive signal towards stabilisation of prices but the policy makers need to check continued price pressure in pulses and onions”, said D.S. Rawat, secretary general of Assocham.
However, the price of fish-marine (2%) declined.
The inflation in fuel and power segment was (-)11.09%, while for manufactured products it was (-)1.42% in November. The September WPI data has been revised marginally to -4.59% from -4.54% announced earlier.
An official statement, quoting provisional data, said here today that the official Wholesale Price Index for “All Commodities” (Base: 2004-05=100) for October, 2015 rose by 0.5 percent to 177.6 from 176.7 for the previous month. The average twelve month annual rate of rise of the index was recorded at 8.0% for the twelvemonth period ending in November 2015, 0.2% points higher from the twelve month rate of change recorded in October. In October, CPI inflation was 5%.
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In September, RBI had reduced interest rates by a more-than-expected 0.50 percent.
