Inflation Eases: Relief Amid Easing Food Prices

Retail inflation declined to 5.48% in November, coming within the RBI's comfort zone due to falling food prices. This development could pave the way for a rate cut in February by new Governor Sanjay Malhotra. The CPI data shows easing trends in various food and personal care categories.

In a significant economic development, retail inflation declined to 5.48% in November, falling within the Reserve Bank of India's comfort zone. The easing of food prices played a pivotal role, creating potential for a rate cut as the central bank's panel meets under new Governor Sanjay Malhotra in February.

According to the Consumer Price Index (CPI) released by the National Statistics Office, the headline inflation rate had been at 6.21% in October. Key items such as vegetables, pulses, fruits, and transport saw reduced inflation rates, contributing to the overall decline.

Amid high inflation for items like garlic and potatoes, the RBI has been tasked with maintaining headline inflation at 4%, with a margin of 2%. As the CPI data indicate a dropping trend, expectations for a potential rate cut in early 2025 grow stronger.

(With inputs from agencies.)