The wholesale price-based inflation declined to a 21-month low of 5.85 per cent in November on easing prices of food, fuel and manufactured items. The wholesale price index (WPI)-based inflation rate fell to 8.39% in October after being above 10% for 19 months. In November 2021, the inflation rate was 14.87 percent.
“Decline in the rate of inflation in November 2022, is primarily contributed by fall in prices of food articles, basic metals, textiles, chemicals & chemical products and paper & paper products as compared to the corresponding month of the previous year,” the Commerce and Industry Ministry said on Wednesday.
The last time WPI inflation was lower than it was in November 2022, it was 4.83 percent in February 2021.
Inflation in food items decreased to 1.07 percent in November from 8.33 percent the month before.
During the month, vegetable inflation was (-) 20.08%, down from 17.61% in October.
In the ‘Fuel and power’ basket, inflation was 17.35 per cent, while in manufactured products, it was 3.59 per cent in November.
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Retail inflation dipped below the RBI’s upper tolerance level
The Reserve Bank takes into account retail inflation for formulating monetary policy. Data released earlier this week showed retail inflation dipped below the RBI’s upper tolerance level of 6 per cent for the first time in 11 months in November on softening food price index.
Though the consumer price index (CPI) based retail inflation declined to 5.88 per cent in November, experts still expect the RBI to hike interest rates by another 25 basis points in its February monetary policy review.
In November, inflation in the “Fuel and power” basket was 17.35%, compared to 3.59% in the “Manufactured Products” basket.
The Reserve Bank considers retail inflation when determining its monetary policy. Retail inflation fell below the Reserve Bank of India’s upper tolerance level of 6% in November for the first time in 11 months, according to data released earlier this week, which was attributed to a softening food price index.
Although retail inflation measured by the consumer price index (CPI) fell to 5.88% in November, economists still anticipate that the RBI will increase interest rates by another 25 basis points in its February monetary policy review.
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