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Inflation – Food Inflation Cooling off

ICICIdirect Research 13 Dec 2024 DISCLAIMER

CPI inflation came down to 5.5% in November (in line with market expectation) as compared to rose 6.2% YoY in October.

Food inflation which was the major contributor has started moderating. Food inflation now at 9.0% vs 10.9% while core inflation remain flat and lower at 3.7%. (Avg since last 12 month at 3.4%).

Within Food, Vegetables came in down at 29% Vs 42% last month, pulses came down 5.4% Vs 7.4%. Both came down MoM by 5% and 0.2% respectively. Oil and fats inflation is rising MoM since last 3 months (palm oil). Meat and fish rose in November at 4.7% vs 3.2% with 2.7% MoM rise.

Core inflation remained almost flat for almost all items. Gold prices remain high with inflation at 10.4%.

Overall, only 2 items are contributing majority of the inflation: Vegetables (29%), Oil & fats (13.3%). Assuming inflation in these items at normalized 5%, headline CPI inflation would be 3.9%.

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