Consumer Price Index (CPI) inflation in India is expected to decrease to 5.5 per cent year-on-year in November, compared to 6.2 per cent in October, according to a recent report by Morgan Stanley. The report predicts that the monthly index will show a sequential decline, mainly due to falling food prices. It also highlighted a deceleration in core CPI, which excludes food and fuel, as a contributing factor.
The report stated, “We expect CPI inflation to edge downwards to 5.5% year-on-year in November from 6.2% year-on-year in October, aided by a moderation in food prices, even as core CPI increases slightly and fuel prices continue to decline. On a sequential basis, we anticipate the index to decline due to falling food prices and a deceleration in core CPI.”
This easing in inflation comes as a relief for policymakers and consumers, as high food prices have been a significant driver of elevated inflation in recent months. The drop in fuel prices further supports the downward trend, reducing pressure on household budgets and businesses.
The expected moderation in CPI inflation aligns with efforts by the Reserve Bank of India (RBI) to maintain price stability while supporting economic growth. If inflation continues to ease, it could give the central bank more flexibility in its monetary policy decisions.
In a separate report, Union Bank of India also indicated that India’s CPI inflation is expected to ease to 5.4 per cent in November 2024, down from 6.2 per cent in October. This decline is primarily attributed to a seasonal drop in vegetable prices, which had surged significantly in previous months.
The report noted that vegetable prices, a major contributor to the CPI spike in October, showed a substantial decline in November. After recording a 42 per cent year-on-year increase in October – the highest since January 2020 – vegetable price inflation is estimated to have dropped to 27 per cent in November, largely due to a reduction in tomato prices.
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