By:-  Akhil Mittal, Senior Fund Manager Fixed Income, Tata Asset Management.

"CPI for the month of November came at 0.71%, largely in line with market expectations. The low number can be largely attributed to fall in food prices. Food inflation came in at -3.91% Year on Year. GST cuts by the government helped keep overall prices in control. Core inflation slowed to 4.42% increase y-o-y as compared to 4.49% increase in previous month. Part of this core inflation can be attributed to elevated Gold prices. The latest number reiterates the low inflation trajectory and there is a chance that FY26 inflation might undershoot RBI revised inflation projections of 2%.

With food prices continuing to remain low despite uptick in dairy and protein, it does pave way for benign inflation continuing for slightly more time than earlier anticipated. This provides space for easing of policy and give room to MPC for another possible rate but in February 2026. While forward projections for FY27 are around 4%, there are no visible or apparent upside risks to inflation. Hence, the current trajectory does provide space for supporting economy and growth. "