India's Nov 2024 inflation expected to be closer to 5.3%: SBI ECOWRAP

The average inflation numbers for fiscal 2024-25 (FY25) are now trending at 4.8-4.9 per cent, against Reserve Bank of India’s (RBI) 4.5 per cent.

Inflation is only likely to dip from January onwards, but this will be driven by base effects, the newsletter said.

SBI economists are now less hopeful of a February rate cut, and believe the first rate cut is now effectively pushed back beyond that month.

Inflation in bigger states continues to outstrip the all India inflation rate of October. Among the states, Chhattisgarh clocked the highest inflation rate of 8.8 per cent in the month, followed by Bihar at 7.9 per cent and Odisha at 7.5 per cent.

Interestingly, a comparison of year-on-year (YoY) changes and year-to-date changes reveal that YoY changes are far outpacing the latter. There are seven states, whose YoY inflation has crossed more than 2 per cent in a year.

The gap between urban and rural consumers’ inflation trends was sharp for the 8th consecutive month, with rural households paying 1.07 per cent higher than urban India.

CPI headline inflation has peaked in October, but November and December numbers could still be higher than 5 per cent.

“With the currency market being subject to turbulence, we believe a higher inflation number could act as a blessing in disguise for RBI not to signal a rate easing cycle,” the SBI newsletter noted.

Fibre2Fashion News Desk (DS)