November

November CPI Inflation Falls to 5.48%, Signaling Economic Stability and Market Growth

 

The Consumer Price Index or CPI is one of the important indicators that measures the average change over time in the price paid by consumers for a basket of goods and services they avail. It is one of the key metrics used to gauge inflation rates.

In November 2024, the CPI report shows that the CPI Inflation (increase in daily goods and services price) has reduced to 5.48%. This is an ease for the consumers and an improvement compared to October 2024, when the inflation rate was 6.21%, a significantly higher rate. This drop in inflation is a good thing indicating that the price has slowed down making the goods and services affordable for the consumers. 

Additionally, the number now falls within the Reserve Bank of India’s radar of 2-6% which is considered safe for the economy. The Index of Industrial Production (IIP) which measures how much factories and industries are producing goods grew by 3.5% in October 2024 which is slightly better than 3.1% in September 2024.

 

November CPI Data: Important Takeaways

 

Inflation Rates

 

1.CPI (General)- The CPI has increased by 5.48% indicating that the prices have gone up by 5.48% compared with November 2023. 
2. CFPI- The Consumer Food Price Index saw a high increase of 9.04% indicating that the food prices have gone up faster than compared to the general basket of goods.

 

Rural vs Urban Inflation 

 

1. CPI- In rural areas, the CPI has gone high by 5.95% which is a bit higher than in urban areas at 4.38%

2. CFPI- Rural areas have seen a 9.10% increase in food prices while urban areas have experienced a little lower increase of 8.74%

 

Inflation Trend

 

Both the CFPI and CPI data show that the Inflation has dropped after 2023, with the lowest in July 2024, then again rising from August to October 2024 and falling again in November 2024.

 

Inflation in Urban Housing

 

The CPI November report of 2024 shows that housing  inflation in Urban areas was 2.87%, which is a slight increase from 2.81% in October. This indicates a minor increase in housing-related expenses such as rent.

 

Decreased Inflation 

 

The categories that experienced stabilized or decreased prices were vegetables, pulses, sugar, fruits, eggs, milk, spices, and personal care products.

 

Items of Highest Inflation 

 

Garlic(85.14%), Potato (66.65%), Cauliflower (47.79%), Cabbage (43.58%), Coconut Oil (42.13%).

 

Items of Lowest Inflation 

 

Jeera (-35.04%), Ginger (-16.96%), LPG (-10.24%), Dry Chillies (-9.73%)

 

Investors Take on November CPI Inflation 2024

 

The decrease in the inflation rate is generally a positive news for the investors. However, the lower inflation rate is positive but it can also lead to deflationary pressures which can cause harm to the economy. Let’s take down some of the key takeaways for the investors.

1. The lower inflation rate can lead to reduced interest rates thus stimulating economic growth by making it a favourable environment for the business to take loans and expand. This can also benefit the equity market.

2. ⁠A decrease in the inflation rate also leads to more stable market conditions and reduces uncertainty and volatility. This helps the investors to take a long-term view.

3.⁠A lower inflation rate strengthens the Indian currency against any other country’s currency. A stronger Indian currency can benefit exporters and importers as they can earn more money by exporting and buy more amount of goods at lower prices by importing.

 

Conclusion

 

Lastly, the November 2024 CPI data reveals the positive effect of inflation with a reduction to 5.48% providing a relief to the consumers. The stable growth in industrial production, currency appreciation, and low interest rates, creates a favourable environment for economic stability, and expansion of business. While this trend benefits both consumers and investors, it should also be noted that balance should be maintained to avoid the deflationary pressures that will harm the economy.