Retail inflation increases due to rising food prices

Vegetable prices showed a decline in January with a negative inflation print of 15.84 per cent, while that of pulses and products eased to 13.39 per cent. | Representational Photo: iStock.

The all-India general Consumer Price Index (CPI) inflation jumped to 4.62% in October 2019 (new base 2012=100), compared to 3.99% in September 2019. The corresponding provisional inflation rate for rural area was 4.29% and urban area is 5.11% in October 2019 as against 3.24% and 4.78% in September 2019.

India’s retail price inflation rate climbed to 4.62% year-on-year in October 2019, the highest in over a year, from the previous month’s 3.99% and above market expectations of 4.25%.


source: tradingeconomics.com

Inflation rose above the Reserve Bank of India’s medium-term target of 4% for the first time since July 2018. Inflation Rate in India averaged 5.98% from 2012 until 2019, reaching an all time high of 12.17% in November of 2013 and a record low of 1.54% in June of 2017.

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However the belief among market participants is that this surge in inflation is not going to stop the RBI from cutting policy rates in its December meeting, with a set of macro-economic data pointing towards sharper than expected slowdown of the Indian economy.

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