Retail inflation declined to 5.48% in November
Retail inflation has come down to 5.48% in the month of November 2024. This is 0.73% less than the previous month. Retail inflation had reached 6.21% in October due to the cost of food items. This was the highest level in 14 months. Now inflation has come down due to the reduction in the prices of food items. Food items contribute about 50% to the inflation basket.
Inflation figures as compared to October
Urban inflation: Decreased from 5.62% to 4.83%
Rural inflation: Decreased from 6.68% to 5.95%
Food inflation: Decreased from 10.87% to 9.04%
How does inflation affect?
Inflation is directly related to purchasing power. For example, if the inflation rate is 6%, then the value of Rs 100 earned will be only Rs 94. Therefore, investment should be done keeping inflation in mind. Otherwise the value of your money will decrease.
How does inflation increase and decrease?
The increase and decrease of inflation depends on the demand and supply of the product. If people have more money, they will buy more things. Buying more things will increase the demand for things and if the supply is not according to the demand, the price of these things will increase.
In this way the market comes under the grip of inflation. In simple words, excessive flow of money in the market or shortage of things causes inflation. On the other hand, if the demand is less and the supply is more, then inflation will be less.
Inflation is determined by CPI
As a customer, you and I buy goods from the retail market. The Consumer Price Index i.e. CPI does the work of showing the change in the prices related to this. CPI measures the average price we pay for goods and services.
Apart from crude oil, commodity prices, manufactured cost, there are many other things which play an important role in determining the retail inflation rate. There are about 300 goods, on the basis of whose prices the retail inflation rate is decided.
