QuantEco Research | Nov-25 CPI - Turns around from record lows
Download ReportQuantEco Research | Nov-25 CPI - Turns around from record lows
India’s CPI inflation rose by 0.71% YoY in Nov-25 from its record low print of 0.25% in Oct-25. Notwithstanding the upward move, CPI inflation has been below the lower policy tolerance threshold of 2% in 4 out of the last 5 months and has remained below the 4% target for the tenth consecutive month. The uptick in headline inflation is on account of the ebbing of the deflationary effect of overall food prices, a factor that so far played a key role in keeping overall inflation at extremely subdued levels. Meanwhile, along expected lines, although the disinflationary impact of the GST rate reduction continues to play out, its magnitude has begun to taper. We believe CPI inflation bottomed out in Oct-25 and the trajectory is likely to be upwards hereon on the back of adverse statistical base effects, volatility in vegetable prices, spike in prices of precious metals, and lagged impact of INR depreciation. Overall, we maintain our FY26 CPI inflation estimate at 2.1%.