In November, India's retail inflation is expected to have increased, reversing a three-month decline, primarily due to higher food prices, according to a Reuters poll. The consumer price index (CPI) is anticipated to have risen at an annual rate of 5.70%, up from 4.87% in October. The surge in volatile food prices, constituting almost half of the inflation basket, is attributed to staples like onions, tomatoes, and pulses.
Economists participating in the December 5-7 Reuters poll, which involved 41 experts, provided a range of forecasts from 4.50% to 6.50%, with a few anticipating a breach of the upper limit of the Reserve Bank of India's (RBI) 2%-6% target range. Despite the potential proximity to the upper end of the target, the RBI is expected to refrain from immediate intervention to address the escalating food prices. RBI Governor Shaktikanta Das emphasized last month that inflation remains susceptible to "recurring and overlapping" shocks in food prices. The central bank appears cautious about reacting to short-term fluctuations, especially given the unpredictable nature of food price movements.