Retail inflation zooms to 4.88% in November on high food prices

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New Delhi: The retail inflation rate broadly measured by the Consumer Price Index (CPI), stood at 4.88% in November, against October’s 3.58%. This was against the target set by the Reserve Bank of India’s (RBI’s) i.e. 4.0% in medium-term, especially because of soaring food prices amid unseasonably heavy rains.

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The rate of retail food inflation during November stood at 4.42% on a year-on-year basis, against 1.90% the previous month.

Today’s figure is in line with a poll conducted by Reuters among more than 30 economists. The poll had predicted the November retail inflation to hit a 13-month high of 4.20%. This is also the in line with the prediction of RBI. The higher inflation rate is unlikely to push the RBI to change the repo rate, or the rate at which the central bank lend money to commercial banks, anytime soon, according to economists polled by Reuters.

November’s heavy rains “created lots of damage” for perishable fruit and vegetable crops, Larsen & Toubro group chief economist Rupa Rege Nitsure had said. “We have seen that translated into price rises for onions, tomatoes and other perishable commodities”.

Source & Photo Credit: Business Standards

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