CPI inflation rises for second consecutive month

Inflation based on the consumer price index (CPI) moved up to 4.9% on-year in November compared with 4.5% in October. However, it was lower than the 6.9% printed in November 2020. While the high-base effect from last year is helping, it is wearing out gradually, and this is contributing to the pick-up in inflation. Rising food and core inflation also pulled the CPI up, while fuel inflation eased as crude prices moderated.

With impact of the high statistical base wearing off, CPI inflation is beginning to reflect the pressure built over the past few months. While non-food inflation had already been rising over the past few months, food inflation has begun to tick up as well. We expect non-food inflation to remain under pressure in the coming months as commodity prices remain elevated, and producers passing through high input costs to consumers amid improving demand conditions.

Inflation trends in November: highlights

• CPI inflation rose to 4.9% on-year in November from 4.5% in October and 6.9% in November 2020
• Sequentially, CPI grew 0.5% on-month on a seasonally adjusted basis, slower than the 0.8% seen in October¹
• Food inflation rose to 1.9% on-year compared with 0.8% October, but was lower than 9.5% in November 2020
• Fuel² inflation moderated to 13.3% from 14.3% in October, but higher than 1.6% in November 2020
• Core³ inflation rose to 6.2% from 5.9% in October, and 5.7% in November 2020
• Urban inflation rose to a greater extent than rural. Urban inflation came at 5.5% in November compared with 5% in October, while rural inflation was 4.3% versus 4.1% in October

¹ All on-month inflation numbers are seasonally adjusted
² Refers to fuel and light category
³ Refers to CPI, excluding food and beverages and fuel and light