National CPI headline inflation for the first five months of FY23 stands at 25.1 percent. It was a little over 9 percent for the same period in FY22, and a little under 9 percent a year before that. November’s year-on-year increase of 23.8 percent marks the sixth straight month of CPI staying clear of 20 percent – a first in history.

This is roughly around the time when high base effect will start to kick in. Last year in November, the CPI had entered double-digit, and has stayed there since. On month-on-month basis, the pace will surely come down, as two big energy price adjustments have largely taken place. Between June to October, month-on-month CPI went as high as 6.3 percent, staying clear of 2 percent for all but one month. That was the time when electricity base price adjustments were being made, and petroleum taxes were gradually increased.

With electricity tariffs taken care of, for a good period, and petroleum consumer prices plateauing, despite higher tax incidence, transport and energy related month-on-month increase should stay in control. Whether the government has the currency to rationalize natural and imported gas prices for end consumer, is guesswork at the moment. But that is about the only thing that threatens to take energy related inflation away from where it is.

Food price increase continues to stay over 30 percent year-on-year, with perishable items showing higher increase. While the perishable food prices may or may not soften, non-perishable, barring one or two items, has a history of going only one way – and that is up. Another round of currency depreciation may just be around the corner, and that could invite higher prices at stores.

Import constraints add another dimension to food prices, as lentils, tea, soybean, and poultry prices face more upside risk. While the headline month-on-month number has steadied for November, core inflation continues to keep the pace up. Rural NFNE core inflation for the month soared by 2.1 percent over last month, and near 20 percent year-on-year – highest in a long time.

Housing sub-index offers the calm irrespective of how accurately or otherwise it reflects the ground reality. Electricity price increase will stay moderate for the next few months, not because the actual increase is not massive, but only because PBS does not account for the impact of removal of previous slab benefit of electricity consumers. But that is for another day.

The wholesale price index at 28 percent is at an 8-month low – but the highs that it has seen during the time are unprecedented. The WPI increase of 27.7 percent for November 2022 comes from a very high base from last year. The WPI has averaged 35 percent in FY23 so far, and the impact on retail prices will continue to reflect in the coming months, before slowing down.