Easing Inflation: India's CPI Expected to Drop in November
India's Consumer Price Index (CPI) inflation is projected to decrease to 5.4% in November 2024 from 6.2% in October due to a drop in vegetable prices. However, other food segments show mixed trends, with edible oil and meat prices rising, indicating potential inflationary pressures ahead.
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- India
According to a report from Union Bank of India, India's Consumer Price Index (CPI) inflation is predicted to ease to 5.4% in November 2024, a decline from October's 6.2%. The reduction is largely attributed to a seasonal decrease in vegetable prices, which surged considerably in recent months.
The report emphasizes that vegetable prices, which were significant contributors to the CPI increase in October, witnessed a notable decline in November. After a 42% year-on-year spike in October—the steepest since January 2020—vegetable price inflation is expected to fall to 27% in November, largely due to lower tomato prices. As a result, food inflation overall is projected to recede to around 8%, down from 9.7% in October.
Despite a relief in vegetable prices, the report points out mixed trends in other food areas. Edible oil prices have continued to climb, with a year-on-year inflation rate reaching double digits at 13.5%, the highest since April 2022. While there was a slight moderation month-on-month, increased import duties maintained inflation pressure. Additionally, inflation in meat and fish increased to 6% in November, up from 3.2% the prior month. Non-vegetable CPI inflation rose to 3.7% in November, marking a nine-month high, fueled by firming prices in edible oils, meat, and eggs, alongside moderate hikes in gold prices.
The report anticipates that CPI inflation, excluding vegetables, might rise further in the coming months due to core inflation trends. Although the easing of vegetable prices in November provided temporary relief, the report warns of potential inflationary pressures from other food and non-food sectors during the remainder of FY25.
(With inputs from agencies.)
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