Dec 12 (Reuters) – India’s annual retail inflation quickened to 0.71% year-on-year in November, picking up from a record low in October, as the pace of decline in food prices slowed, government data showed on Friday.
A Reuters poll had projected retail inflation at 0.7%. The latest print was below the Reserve Bank of India’s target range of 2% to 6% for the third straight month.
COMMENTARY:
TERESA JOHN, LEAD ECONOMIST, NIRMAL BANG, MUMBAI
“CPI inflation quickened to 0.71% in November from 0.25% in October as food inflation bottomed out, led by higher vegetable prices due to unseasonal rains.
“Core inflation, however, moderated at the margin to 4.34% in November from 4.41% in October on relatively muted inflation in housing and precious metals. GST cuts are also contributing at the margin.”
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
“November inflation was in line with expectations. Perishable food costs are off their lows and inching up on a sequential basis, though are still benign on annual terms.
The new revised and rebased CPI inflation series will be released in February 2026, which is likely to assign lower weightage to food and higher to non-food, besides better reflecting e-commerce/platform services data.”
MADHAVI ARORA, CHIEF ECONOMIST, EMKAY GLOBAL FINANCIAL SERVICES, MUMBAI
“India’s inflation is largely in line with the forecast and augurs well with our annual forecast of 1.92%. It is likely to keep the RBI comfortable with its current stance.”
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
“While the inflation trajectory is expected to move upward from here on, we see the trajectory fairly benign until H1 FY27.
Going ahead, with the RBI having kept additional actions data dependent, we see some room for 25 bps repo rate cut. However, the rate-cutting cycle is clearly nearing the end, followed by a prolonged pause.”
GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI
“Amid continued pass-through of GST cuts and led by softer food prices, India CPI inflation posts yet another sub 1% reading.
Headline CPI for FY26 will likely undershoot RBI’s estimate by 15-20 basis points. With visibility of the print remaining below 4% in Q1 FY27, we believe the room for another 25 bps rate cut is still open.”
SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM
“October was the lowest print on inflation seen in recent years and inflation is now expected to inch up over the coming months as the base effect turns.”
“That said, given the impact of GST rate cuts as well as ample food supply, inflation is expected to average below 3% in the remaining part of FY26 and below 4% in H1 FY27. This should provide room for the RBI to deliver another rate cut in the Feb policy as growth shows signs of losing momentum post the festive season.”
