New Delhi [India], December 7 : India's Consumer Price Index (CPI) inflation is expected to ease to 5.4 per cent in November 2024, down from 6.2 per cent in October, according to a report by Union Bank of India.
The decline is primarily attributed to a seasonal drop in vegetable prices, which surged significantly in the previous months.
The report highlighted 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 Octoberthe highest since January 2020vegetable price inflation is estimated to have dropped to 27 per cent in November, driven largely by a reduction in tomato prices.
Consequently, overall food inflation is projected to have cooled to around 8 per cent, compared to 9.7 per cent in October.
It said "The ghost of vegetable prices is seen to be fading away in November'24, CPI likely eased to 5.4 per cent from October hump of 6.2 per cent, we think that the CPI for the month of Nov'24 took a breather".
However, inflation in other food segments showed a mixed trend. Edible oil prices continued to rise, with year-on-year inflation hitting double digits at 13.5 per cent, the highest since April 2022.
While month-on-month edible oil inflation moderated slightly, the effects of increased import duties persisted. Additionally, inflation in meat and fish rose to 6 per cent in November, up from 3.2 per cent in the previous month.
The report also noted a slight increase in CPI excluding vegetables, which rose to 3.7 per cent in November from 3.6 per cent in October, marking a nine-month high. This uptick was driven by firming prices in non-vegetable food categories like edible oils, meat, and eggs, along with moderate increases in gold prices.
The report anticipated that CPI inflation, excluding vegetables, may continue to rise in the coming months due to strengthening core inflation trends.
While the overall easing of vegetable prices provided some relief in November, the report however warns of potential inflationary pressures from other food and non-food segments during the remainder of FY25.
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