According to government data, retail inflation (CPI based) stood at 0.71% in November 2025, mainly due to rising prices of vegetables, protein-rich foods and fuel. This information was released on Friday. Last month in October, retail inflation was at a record low of 0.25%. The main reasons for the decline in inflation in October were said to be the cut in GST rates and favorable base effect.
Depreciation on food items reduced
According to National Statistical Office (NSO) data on Friday, depreciation in food items stood at 3.91% in November, compared to 5.02% in October. The rise in core inflation in November was driven by rise in prices of vegetables, eggs, meat and fish, spices, fuel and lighting expenses, NSO said. Notably, fuel and light inflation stood at 2.32% in November, higher than 1.98% in October.
RBI’s outlook and state of the economy
The Reserve Bank of India (RBI) earlier this month cut its inflation forecast for the current financial year to 2%, from 2.6% earlier. RBI said that rapid disinflation is being seen in the economy. Also, the RBI has reduced the policy interest rate by 25 basis points to 5.25% and described the Indian economy as being in a “rare Goldilocks period”, i.e. balancing low inflation with high growth. The Reserve Bank raised the GDP growth estimate for FY26 to 7.3%, from 6.8% earlier. India recorded a growth rate of 8% in the September quarter and 7.8% in the June quarter.
What is CPI?
The CPI, or Consumer Price Index, measures changes over time in the general level of prices of goods and services that households purchase for consumption. The CPI is widely used as a macroeconomic indicator of inflation, as a tool by governments and central banks to target inflation and monitor price stability, and as a deflator in the national accounts. CPI is also used to index dearness allowances paid to employees to rise in prices.
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