India Headline Inflation Ticks Up; Core Inflation Remains Sticky: Systematix
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Systematix Research Report
The uptick in headline inflation to 4.9% in November 2021 was supported by the rise in cereal, edible oil and vegetable prices. Core inflation remained sticky at 6.2%, under which prices of household goods continued to rise.
Urban headline inflation was higher than rural. However, under the core categories, rural inflation exceeded urban by 102 basis points. The real rates in the economy remain negative due to elevated inflation.
The repo rate stood at down 2.1%, while the short-term money market rates at down 2.7% in Nov-21. In FY22, the risks to overall inflation remain on the upside as the base effect fades and would likely emanate from-
a rise in telecom tariffs,
goods and services tax on clothing and footwear,
continued supply chain disruptions,
pass-through of input costs on consumer prices upon demand revival, especially in the service sector.
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