November retail inflation at 4.88%, Industrial production falls to 2.2% in October

NEW DELHI: Consumer price inflation CPI ), or retail inflation as it is better known, for the month of November stood at 4.88 per cent with comparison to 3.63 per cent during the corresponding period last year.The government data revealed on Tuesday shows that the inflation rate has surged to 15-month high. The previous high was recorded at 5.05 per cent in August last year. November's inflation numbers also breached the RBI 's (Reserve Bank of India) mid-term target of 4 per cent.The data released today shows that the bulk of the rise in inflation was due to rising food prices as the CFPI or food inflation stood at 4.42 per cent, compared to 1.90 per cent in the month of October. A further break down of the data reveals that inflation in eggs shot to 7.95 per cent in November on annual basis, as against 0.69 per cent in the previous month. For vegetables it was 22.48 per cent in November. The inflation in the segment was a only 7.47 per cent in October.A Reuters poll of economists predicted the inflation rate to come at 4.20 per cent. The RBI too, after its last policy meet, had revised the inflation forecast for the next two quarters from 4.2 - 4.6 per cent to 4.3- 4.7 per cent.Though the rise in inflation was all but expected, analysts were in fact taken by surprise by the quantum of spike in inflation. "Inflation has accelerated at a pace much higher than what was expected. Clearly the pressure from inflation is becoming more apparent," Sunil Sinha, director and principal economist, India Ratings said. Tushar Arora, senior economist, HDFC Bank said,"The upside in vegetable prices have lasted a bit longer than earlier anticipated. We now expect inflation to remain above 4 percent in FY 2018 and in early FY 2019 as well."Ahead of the data, Rupa Rege Nitsure, group chief economist at Larsen & Toubro had said that November's heavy rains "created lots of damage" for perishable fruit and vegetable crops. "We have seen that translated into price rises for onions, tomatoes and other perishable commodities," she said. "Increased house rent allowances for government employees and rising crude oil prices added to inflationary pressures alongside higher raw material costs due to the Goods and Services Tax (GST) rollout," she added.The uptick in inflation is expected to further affirm RBI's stand of maintaining a neutral stance. The repo rate which was last trimmed in August, thus seems unlikely to receive a further cut, which may come across as a dampener for private investment. "In my view, the scope for any rate cut this fiscal (year) is completely ruled out. I do not see much of change in RBI's stance in the next 6 months," Sunil Sinha stressed.(With inputs from agencies)