Data released showed that industrial output growth jumped to a 16-month high in October led by solid manufacturing, power, and mining sector expansion, while retail inflation surged to a three-month high in November due to food prices led by vegetables.
The consumer price index (CPI) indicated 5.6% annual growth in inflation in November 2022, which was somewhat less than the 5.9% reported in October but higher than the 4.9% in October. From 6.6% in October to 8.7% over the month, the food price index increased. Urban inflation was 5.3%, while rural inflation was 5.9%.
Vegetable prices soared 17.7% in November, while pulses shot up 20.2%. Data showed onion inflation surged nearly 87% in November from 1.7% in June. RBI governor Shaktikanta Das in his monetary policy statement last week had cautioned that there is no immediate prospect of a policy “loosening”, and warned of uncertainties in future inflation management, mainly due to unpredictable food prices, and had anticipated elevated Consumer Price Index (CPI) data for November.
“Given the lingering uncertainty around Kharif production and rabi sowing prospects, high food prices can not be shrugged off as entirely transient and could further feed into the inflationary expectations. Hence, supply-side interventions by the government become crucial at this juncture to ensure sufficient buffer stock of essential food items,” ratings agency CareEdge said in a note.