Retail Inflation dropped below 6% in November for the first time in FY 2022

Retail Inflation dropped below 6%: According to the Monetary Policy Report, Retail inflation slips below 6% after 10 months in the financial year 2022. Retail inflation has now fallen below RBI’s tolerance band for the first time in 2022. India’s annual retail inflation eased below its central bank’s upper tolerance level for the first time this year in November 2022, on the back of the softer rise in food prices, easing pressure on policymakers. Based on Consumer Price Index (CPI), retail inflation has slipped to an 11-month low of 5.88% in November 2022 while the rate was 6.77% in October 2022.

Vegetables and edible oils recorded 8.1% and 0.6% deflation, respectively, from November 2021 levels, but inflation in cereals continued to accelerate, rising from 12.1% in October 2022 to nearly 13%. Price rise in Milk and Spices also picked up pace to touch 8.16% and 19.5%, respectively.

Retail Inflation Slipped below 6%

Last week, while raising the monetary policy rate by 35 basis points to 6.25%, the Central Bank had projected the inflation to average 6.6% in the current quarter (October and December 2022) and 5.9% between January and March 2023. Retail inflation fell to an 11-month low of 5.88 per cent in November 2022, have a look at the graph below depicting the fall and rise of retail inflation in the year 2022.