Retail inflation saw a slight increase to 0.71% in November, up from October's 0.25%. This rise occurred as food deflation lessened. Price pressures remained subdued due to tax cuts and softer food prices. Inflation stayed below the central bank's...
By ET Bureau | Updated:
New Delhi: Retail inflation edged up slightly to 0.71% in November, from a record-low of 0.25% in October, as food deflation narrowed, official data released on Friday showed. Price pressures stayed muted amid goods and services tax (GST) cuts and softer food prices.
This was the fourth month in FY26 that inflation stayed below the central bank's target range of 4%, with a margin of two percentage points on either side of that figure.
"The uptick was primarily driven by the fading favourable base from last year and a seasonal rise in prices of certain food items, which narrowed the deflation within the food basket," said Rajani Sinha, chief economist at CareEdge Ratings.
Food prices fell for sixth straight month, declining 3.9% in November after a 5% drop in October.
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Rural inflation rose marginally to 0.1% year-on-year from a 0.3% decline in October, while urban inflation increased to 1.4% from 0.9%.
Out of 22 major states and union territories, eight recorded higher inflation than the national average. Kerala led with 8.3% inflation, followed by Karnataka (2.6%), Jammu & Kashmir (2.3%), Tamil Nadu (2.1%), and Punjab (1.7%).
Rate cuts
"The evolving inflation-growth outlook as well as the fiscal policy measures unveiled by the next union budget will guide the Monetary Policy Committee's (MPC) next decision," said Aditi Nayar, chief economist at ICRA. "Our base case suggests a pause in the February 2026 policy review."
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Sakshi Gupta, principal economist at HDFC Bank, though, believes there's scope for a rate cut. "With a comfortable inflation trajectory in place, we believe that the RBI has space to cut rates further by 25 bps, even though it remains a close call," she said.
