Retail inflation in India is anticipated to decline: Report

INN/New Delhi, @Infodeaofficial

According to a Morgan Stanley analysis, a drop in food costs is predicted to cause India’s retail inflation, which is measured by the Consumer Price Index (CPI), to decrease to 5.5% in November. “Despite a slight increase in core and a continued drop in fuel prices, we anticipate CPI inflation to gradually decrease to 5.5% in November from 6.2% in October, helped by a slowdown in food prices. We expect the index to fall sequentially due to declining food costs and a slowdown in the core CPI,” the research stated.

Food and fuel, whose prices are thought to be more volatile, are not included in the core CPI, which also includes goods and services. October’s CPI inflation increased to 6.21% due to a surge in the cost of food goods like vegetables. For the first time in recent months, inflation exceeded the RBI’s top ceiling of 6%.

Due to crop damage and decreased market availability caused by this year’s late monsoon withdrawal, retail inflation has risen from 5.49 percent in September to 42.18 percent in October as vegetable prices have skyrocketed.

The growth story of India is still intact, stated RBI Governor Shaktikanta Das last week. We cannot ignore the substantial dangers in the outlook, even while inflation is on the decline. One should not undervalue this risk. “The balance between inflation and growth is well poised,” the RBI Governor said, expressing optimism about the state of the economy.

The Reserve Bank of India (RBI) maintained the key policy repo rate at 6.5% while keeping an eye on inflation. On Friday, the RBI cut the cash reserve ratio (CRR) for banks by 0.5% to increase the amount of money available for lending to promote economic growth. The CRR drop will lower market interest rates and inject Rs 1.16 lakh crore into the banking system.