In November, India experienced a notable increase in its retail inflation, reaching 5.55 percent, as reported by the Ministry of Statistics and Programme Implementation. This rise marks a jump from the 4.87 percent figure in October, mainly due to heightened food prices and a challenging base effect.
Despite forecasts of a 5.8 percent increase, the actual inflation rate of 5.55 percent remained within the Reserve Bank of India’s (RBI) approved range of 2-6 percent for the third month in a row. Compared to the same period in 2022, when retail inflation was 5.88 percent, the present rate indicates a little decrease.
Significant contributors to the overall increase include the food inflation rate, which escalated to 8.70 percent in November from October’s 6.61 percent. This inflation in the food sector is primarily driven by the rising costs of vegetables and pulses, which saw rates of 17.70 percent and 20.23 percent, respectively. Additionally, the inflation rate for the broader ‘Food and Beverage’ category climbed to 8.02 percent.
In response, the government has implemented several strategies to stabilize food prices. These measures encompass augmenting buffer stocks, liberalizing the import of essential food items, and ensuring regular market releases. Additionally, efforts to combat hoarding and efficiently distribute supplies through specific retail channels have been made to curb price rises.
The manufacturing sector’s output rose by 10.4 percent, complemented by growth in the mining and power sectors of 13.1 percent and 20.4 percent, respectively. The production of capital goods and consumer goods also saw significant increases. Despite a 4.1 percent contraction in the Index of Industrial Production (IIP) in October 2022, the industrial sector overall exhibited strong performance due to favorable baseline effects and sustained economic activities.
The Indian economy performed well in the third quarter, growing 7.6 percent thanks to increased manufacturing activity. As a result, the Reserve Bank of India (RBI) raised its economic growth forecast for the fiscal year 2023-24 to 7%, up from 6.5 percent previously, underlining the economy’s resiliency.
