New Delhi, Dec 12 (FN Bureau) India’s retail inflation measured by consumer price index (CPI) cooled off to 11-month low of 5.88% in November 2022 primarily on the back of decline in food and vegetable prices, showed the data released by the government on Monday. The CPI inflation print had come in at 6.77% in October this year.
In November 2021, the retail inflation was 4.91%. According to the data released by Ministry of Statistics and Programme Implementation (MoSPI), food inflation in November this year declined sharply to 4.67% from 7.01% in the previous month. “While the decline in inflation was expected, this is the first time in 2022 that the inflation has fallen below the upper tolerance limit/level of the RBI,” said Dr Sunil Sinha, Principal Economist, India Ratings and Research. High inflation has been one of the major concerns of the government and RBI. The central bank has been raising policy repo rate since May this year to contain spiralling inflation. As per the November inflation data, food, clothing and footwear and housing inflation declined with inflation of other commodity groups – pan, tobacco and intoxicants, fuel and light and miscellaneous products firming up. Core inflation, however, continued to be elevated at 6.04% in November 2022. Meanwhile, India’s factory output measured by Index of Industrial Production (IIP) contracted 4% year-on-year (YoY) in October 2022 despite it being a festive month which drives consumption.
The official data showed the manufacturing sector witnessing a decline of 5.6% during October 2022. During this period, mining and electricity sectors grew by 2.5% and 1.2% respectively. “While the IIP posted a deeper-than-expected contraction, mirroring the anemic performance of exports, this chiefly reflects holidays during the festive period. The YoY growth of most available high frequency indicators improved in November 2022 relative to October 2022, partly reflecting the subdued base owing to the relatively late onset of the festive season in 2021 vis-à-vis 2022,” said ICRA Chief Economist Aditi Nayar. “Given that the YoY growth in both these months is impacted by base effects, we believe that an average performance of October and November 2022 would provide a better gauge of the actual growth momentum and demand dynamics,” she further said.