Dec 12 Reuters India39;s annual retail inflation eased below its central bank39;s upper tolerance level for the first time this year in November, on the back of a softer rise in food prices, easing pressure on policymakers.

The annual retail inflation rose 5.88 in November from 6.77 in the previous month, government data showed on Monday.

The Dec. 58 Reuters poll of 45 economists had predicted the second consecutive decline in inflation to an annual 6.40 from 6.77 in October.

AURODEEP NANDI, INDIA ECONOMIST AND VICE PRESIDENT, NOMURA, MUMBAI

The November inflation reading at 5.9 YoY was closer to our estimate of 6.1, which was below the consensus forecast of 6.3.

A sharp fall in vegetable prices have largely been the driver of this downside surprise, with a number of other food items continuing to show rise in prices.

In our estimate, core inflation remained largely sticky at around 6, suggesting that underlying inflationary pressures are yet to abate.

PRITHVIRAJ SRINIVAS, CHIEF ECONOMIST, AXIS CAPITAL, MUMBAI

The steep fall in November bringing headline CPI within the RBI39;s target band should bring cheer to policymakers and capital markets.

However, while headline inflation print comes off, inflation risk still resides in the very wide external deficit. Fortunately, the MPC recognises this potential and will likely stay focussed on the inflation risk from a weaker rupee and resilient domestic demand.

If the government also moves in tandem with the RBI and…