Ira Singh
Khabar Khabaron Ki,13 Nov’23
Retail inflation in India eased to a four-month low of 4.87 per cent in October mainly due to cooling prices of food items, according to data released by the Ministry of Statistics and Programme Implementation on November 13.The Consumer Price Index (CPI) based retail inflation fell to a three-month low of 5.02 per cent in September.
The previous low inflation was recorded at 4.87 per cent in June.
The Reserve Bank’s Monetary Policy Committee (MPC), in its October meeting, projected CPI inflation at 5.4 per cent for 2023-24, a moderation from 6.7 per cent in 2022-23.Further,at 4.87 percent, the latest CPI inflation figure is broadly in line with expectations, with economists having predicted prices likely rose 4.8 percent year-on-year in October.
Inflation internals
The October inflation number was largely along expected lines, with food inflation unchanged from September as items within the category cancelled each other out.
Among food items, vegetables led the charge as their index rose 3.4 percent month-on-month (MoM) primarily due to a 15 percent sequential increase in onion prices. Meanwhile, the two other key vegetables – potato and tomato – were more supportive of disinflationary developments. While potato prices were unchanged in October compared to September, those of tomato fell 19 percent MoM.
The declining retail inflation is likely to boost investor confidence and contribute to a more optimistic economic outlook. However, stakeholders will remain watchful of future developments, acknowledging the dynamic nature of economic conditions and the potential for external factors to influence inflationary trends.