Inflation declines to 7.24% due to lower vegetable prices
Chief Economist, HDFC Bank said inflation in November is much lower than what economists had expected and this should also encourage the RBI for more monetary expansion.
Chief Economist, Kotak Mahindra Bank Indranil Pan, said that Inflation data is positive but for RBI to react, the retail inflation needs to come down.
"On December 18 policy of RBI, we are expecting only CRR cut to happen. We expect a cut by 25 basis points in the CRR. Rate change is expected only in January," he added.
Food inflation, as a category in the WPI, rose to 8.5 per cent during the month, from 8.32 per cent a year ago. Food articles have 14.3 per cent share in the WPI basket. Though vegetables in general registered a decline, Potato and onion prices, however, shot up by 72.20 per cent and 17 per cent respectively year on year in November this year.
This is compared to a decline of 9.31 per cent and 35.15 per cent in the same period last year.
Wheat turned expensive by 23.19 per cent in November from a decline of 4.86 per cent in the same month a year ago. Cereals became dearer by 15.85 per cent from a rise of 2.15 per cent in the same month last year.
Pulses and eggs, meat and fish became costlier by 19.10 per cent and 14.19 per cent in November.
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