Retail inflation hits 4-month low in Oct
NEW DELHI : Retail inflation fell to a four-month low of 4.87% in October as food prices eased, prompting expectations that the central bank may yet again keep policy rates unchanged at its monetary policy review next month. Consumer Price Index (CPI)-based inflation stood at 5.02% in September, remaining within the Reserve Bank of India’s (RBI’s) comfort zone of 2-6% for the second consecutive month. In October 2022, retail inflation stood at 6.77%.
A Mint poll of 17 economists estimated India’s retail inflation to cool to 4.8% in October; however, they believe volatile vegetable prices could still upset forecasts. Food inflation, measured by the Consumer Food Price Index, which accounts for nearly half of the overall consumer price basket, slowed to 6.61% in October from 7.01% a year earlier. Food inflation was at 6.62% in September, according to data released by the ministry of statistics and programme implementation.
Reduction in food and cooking gas prices led to lower retail inflation in October, said N.R. Bhanumurthy, VC at Dr. B.R.
Ambedkar School of Economics University, Bengaluru. Last month, the Union cabinet approved a hike of ₹100 for cooking gas subsidy under the Pradhan Mantri Ujjwala Yojana (PMUY), helping beneficiaries get a total subsidy of ₹300 per LPG cylinder at market price. However, an increase in international oil prices due to the conflicts in Israel and Ukraine and further volatility in food prices, especially of staple vegetables like onions and tomatoes, and pulses, continue to pose inflationary risks, Bhanumurthy said.
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