India’s CPI inflation in Nov-24 came exactly in line with our expectation at 5.48%YoY, easing from a 14-month high of 6.21% in Oct-24.
Download ReportQuantEco Research || Nov-24 CPI: The much-awaited downside materializes
The downside was led by food and fuel indices, both of which contracted on a sequential basis. Nov-24 marked the onset of correction in vegetables prices, led by tomatoes and other seasonal winter vegetables after a strong build-up seen over the previous two months. Other food categories of pulses, sugar, fruits etc. also added to the downdraft. As such, there is evidence of food price shock now dissipating, that is likely to continue over the next 2-4 months amidst onset of winter, advent of Kharif produce and healthy prospects of Rabi crop. With FY25 GDP growth projections getting downwardly revised post the release of Q2 data (our estimate is now at 6.4%), the anticipated food disinflation should allow the RBI to ease policy rate by 25 bps in Feb-25, as also the MPC’s compositional changes unfolds.