Retail inflation drops to 5-month low of 4.87% in October
India's retail inflation rate, as measured by the Consumer Price Index (CPI), dipped to a five-month low of 4.87% in October, according to the Ministry of Statistics and Programme Implementation. The decrease is credited to a favorable base effect and a drop in prices for certain items. However, the surge in onion prices restricted the decline in inflation. Economists had anticipated an inflation rate of approximately 4.8% year-on-year for October, making the actual figure largely consistent with predictions.
Food inflation remains unchanged, onion prices rise
The inflation rate for October was mostly as anticipated, with food inflation remaining steady from September. Among food items, vegetables experienced a 3.4% month-on-month (MoM) growth in their index, mainly due to a 15% sequential increase in onion prices. Other significant vegetables, such as potatoes and tomatoes, displayed disinflationary patterns. Potato prices stayed constant, while tomato prices dropped by 19% MoM. Overall, Consumer Food Price Inflation in October was 6.61%, marginally altered from September's 6.62%.
Other factors affecting inflation in October
Besides the hike in vegetable prices, eggs also registered a 3.4% MoM rise in prices, while pulses climbed by 2.5% and cereals by 0.8%, suggesting that price momentum remains a concern. Conversely, edible oils helped counterbalance these pressures as their index decreased by 0.8% MoM in October. Despite the fall in headline inflation, it has persisted above the Reserve Bank of India's (RBI) medium-term target of 4% for 49 consecutive months, remaining within the acceptable range of 2-6%.
