The nation’s retail inflation, as measured by the Consumer Price Index (CPI), fell to an 11-month low of 5.88% in November, down from 6.77% in October. India’s factory output, as measured by the Index of Industrial Production (IIP), contracted by (-)4.0% in October, according to two separate reports published by the Ministry of Statistics & Programme Implementation (MoSPI) on Monday.
The retail price index has not been this low since December 2021. The Consumer Price Index (CPI) has fallen below the Reserve Bank of India’s (RBI) upper margin of 6% for the first time in 2022. The government has instructed the central bank to maintain retail inflation at 4%, plus or minus 2%, for a period of five years ending in March 2026.
The central bank considers the CPI data while formulating its semimonthly monetary policy. The Monetary Policy Committee (MPC) increased the repo rate by 35 basis points to 6.25 percent last week. To combat the galloping inflation, the MPC has increased the key interest rate by 225 basis points so far this fiscal year.
