Nov retail inflation in line with expectations at 5.48%

The latest macro numbers brought some good news for the Indian economy on Thursday as retail inflation measured by the Consumer Price Index (CPI) came in at 5.5% in November, a moderation from 6.2% in October when the headline number went outside the central bank's target band of 2%-6% for the first time since August last year.

- Roshan Kishore

Industrial activity, as measured by the Index of Industrial Production (IIP), grew 3.5% in October, up from its 3.1% reading in September. Both CPI and IIP numbers are in line with analyst estimates. Experts believe that the latest inflation print, at least on its own, has not worsened the odds of the RBI (Reserve Bank of India) cutting interest rates in its February meeting.

The National Statistical Office (NSO) released inflation data for November on Thursday. At 5.48%, the latest inflation reading is in line with the 5.5% forecast by a Bloomberg poll of economists. November's inflation print marks a moderation from the October reading, largely a result of reduction in food inflation which fell by almost two percentage points from 10.9% in October to 9% in November.

A high food inflation valuefood has a share of 39% in the CPI basket has been the primary reason for the headline CPI print staying above RBI's target of 4% and the central bank not cutting interest rates.

In the two months, July and August, where food inflation was under 6%, the headline inflation number was lower than 4% as well.