Explorer

Inflation In India Likely Softened To Nine-Month Low In November, Shows Economists Poll

To tame surging inflation, the RBI has hiked 225 basis points of interest rate so far, taking it to 6.25 per cent

Consumer price (CPI) inflation in India likely cooled to a nine-month low of 6.40 per cent in November mainly because of moderation in food prices, according to a Reuters poll of economists.

According to a Reuters’ report, inflation has stayed above the upper end of the Reserve Bank of India's (RBI’s) 2-6 per cent tolerance band throughout the year. This has triggered 225 basis points of interest rate hikes to the repo rate so far, taking it to 6.25 per cent. If the inflation forecast is correct, the decline would take it to where it was just before Russia invaded Ukraine in February, which sent global food and commodity prices soaring.

Food prices alone account for nearly 40 per cent of the consumer price index (CPI) basket in Asia's third largest economy.

The December 5-8 Reuters poll of 45 economists predicted the second consecutive decline in inflation to an annual 6.40 per cent from 6.77 per cent in October. Forecasts were in a 6.00 per cent -7.02 per cent range.

"We will continue to see inflation falling. Lower food prices, especially vegetables, and stable energy and gasoline prices should see India's headline inflation index dropping to a level roughly in line with policy interest rates," noted Robert Carnell, head of ING's Asia-Pacific research.

On Wednesday, the RBI raised interest rates by a smaller 35 basis points following three successive 50-basis-point rises and is due to raise them again by 25 basis points early in 2023. The central bank maintained its inflation forecast for financial year 2022/23 at 6.7 per cent. However, economists were not ready to say the downtrend over the last few months is here to stay.

"To be sure, policymakers will have to be vigilant because headline CPI inflation is still expected to be sticky, and average 6.5 per cent between October 2022 and March 2023, in our view," noted economists at J.P. Morgan. "Monthly momentum of core inflation re-accelerated in September and October to 0.5-0.6 per cent which translated into 6.5 per cent year-over-year in October. Furthermore, there are upside risks to food inflation particularly from cereals."

View More
Advertisement
Advertisement
25°C
New Delhi
Rain: 100mm
Humidity: 97%
Wind: WNW 47km/h
See Today's Weather
powered by
Accu Weather
Advertisement

Top Headlines

Bird Strike Or Fog: What Led To Kazakhstan Plane Crash That Killed At Least 30
Bird Strike Or Fog: What Led To Kazakhstan Plane Crash That Killed At Least 30
Renowned Malayalam Writer MT Vasudevan Nair Dies At 91, Kerala Govt Announces 2-Day Mourning
Renowned Malayalam Writer MT Vasudevan Nair Dies At 91, Kerala Govt Announces 2-Day Mourning
ABP News Checks AAP's Claim Of 'Cash-For-Vote Scam' Against BJP, Revelations Will Shock You. VIDEO
ABP News Checks AAP's Claim Of 'Cash-For-Vote Scam' Against BJP, Revelations Will Shock You. VIDEO
One Dead, 20 Rescued After Tourist Boat Capsizes In Goa
One Dead, 20 Rescued After Tourist Boat Capsizes In Goa
Advertisement
ABP Premium

Videos

Anya Polytech IPO: Must Watch Exclusive Interview Before Investing | Paisa LiveWhy Payas Pandit Struggled to Gain Recognition Despite Her Bhojpuri Debut with Pawan Singh?Sambhal News: ASI Team to Inspect Stepwell Today, Exclusive Pictures from the SiteBJP Accuses AAP of Deceiving Public with New Schemes Ahead of Delhi Elections

Photo Gallery

Embed widget