NEW DELHI: Retail inflation rose to a three-month high in November as food prices led by vegetables rose, while industrial production growth soared to a 16-month high in October, led by the robust expansion of the industrial, electrical and mining sectors, showed data released on Tuesday.
Inflation, as measured by the consumer price index (CPI), rose 5.6% annually in November, up from 4.9% in October but slightly lower than the 5.9% recorded in November 2022. The price index of food rose to 8.7% during the month, from 6.6% in October. Rural inflation was higher, at 5.9%, while urban inflation was 5.3%.
Vegetable prices rose 17.7% in November, while pulses rose 20.2%. Data showed that onion inflation rose nearly 87% in November from 1.7% in June. RBI governor Shaktikanta Das in his monetary policy Last week's statement warned that there was no immediate prospect of an “easing” of policy and warned of uncertainties in managing future inflation, mainly due to unpredictable food prices, and anticipated elevated Consumer Price Index (CPI) data. for November.

“Given the persistent uncertainty surrounding Kharif production and rabi sowing prospects, high food prices cannot be considered entirely transitory and may further fuel inflationary expectations. Thus, the government's supply-side interventions make are crucial at this juncture to ensure a sufficient buffer. essential food stocks,” rating agency CareEdge said in a note. The Center has already taken some measures, such as banning onion exports and restricting the use of sugarcane in ethanol production, to calm price pressures.
“An unfavorable base is still expected to push CPI inflation upwards to around 5.8-6% in December. However, with the arrival of new crops on the market during January-March, overall inflation could decrease to 5.1% at the end of the fiscal year. For the entire fiscal year, we expect inflation to average 5.4%, with risks skewed to the upside,” the agency said.
Separate data showed a recovery in IIP growth in October, after the upwardly revised 6.2% in September. The capital goods sector, a key indicator of investment activity, increased by 22.6% during the month, compared to the 2.9% contraction in October last year. The infrastructure and construction sector increased by 11.3% in October, compared to 1.7% growth last year. Various data, including the manufacturing PMI, pointed to a robust recovery in the sector.
“Although the elevated reading was on a low base (PII was -4.1% in October last year), activity increased sequentially with the start of the festive season. However, there are signs of a slowdown ahead. RBI’s December consumer confidence survey showed weakening in future expectations,” said DK Joshi, chief economist at Crisil.



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