India’s retail inflation surged to 6.21% in October, a 14-month high driven by rising food and fuel prices, while industrial output expanded by 3.1% in September.
India’s retail inflation surged to 5.49% in September 2024, driven by food prices, casting doubt on the RBI’s December rate cut plans.
As inflation rates fluctuate, analysts are likely to closely monitor future trends and the potential need for adjustments in monetary policy by the Reserve Bank of India.
notably, the retail inflation target set by the RBI is 4% with a tolerance band of +/- 2 percentage points, meaning that the target is within the range of 2% to 6%. As per the government data, industrial production grew 4.8 per cent in July against 6.2 per cent expansion a year ago.
The rise in direct tax collections is seen as a positive indicator for the government's fiscal health and its ability to fund various developmental and welfare programmes.
India's retail inflation eased to 3.54 per cent in July, falling below the Reserve Bank of India's 4 per cent target for the first time in years.
Inflation (CPI) dropped in May 2024, from 4.83 per cent to 4.75 per cent (YoY). The corresponding inflation rate for rural and urban rates is 5.28 per cent and 4.15 per cent, respectively.
While formulating its bi-monthly monetary policy, the RBI considers consumer inflation. It notes that uncertainties surrounding food prices continue to exert influence on the inflation trajectory in the foreseeable future.
The Reserve Bank of India has been tasked by the government to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.
At the same time, retail inflation increased to 5.55 percent in November after reaching a four-month low of 4.8 percent in October.
The data's release is closely monitored by economists, policymakers, and the public as it provides insights into changes in the cost of living and purchasing power for citizens.
The inflation has come back to the Reserve Bank's comfort level of below 6 per cent after a gap of two months. The previous low was in June this year when the reading stood at 4.87 per cent.
The growth in IIP was broad-based, with all the three major sectors – manufacturing, mining and electricity – registering positive growth.
Previously, high inflation was recorded at 7.79 per cent in April 2022.
Similarly, food inflation stood at 7.03 per cent and 6.70 per cent in June, compared to 6.31 per cent and 6.07 per cent in May and 5.09 per cent and 5.16 per cent in the year-ago period.
The Index of Industrial Production (IIP), which reflects the country's factory output, rose to 5.2 per cent in May from 4.5 per cent in April 2023, mainly due to good performance by the manufacturing and mining sectors.
Retail Inflation Rate: According to the data released by the National Statistical Office, the inflation in the food basket was at 4.49 per cent in June, higher than 2.96 per cent in May. The food basket accounts for nearly half of the CPI.
This is the fourth straight month when retail inflation has declined and the third month in a row that Consumer Price Index (CPI) based inflation remained within the RBI's comfort zone of below 6 percent.
The retail inflation in the country has slipped to 4.7 per cent in April from 5.66 per cent in March, a government data informed on Friday.
The retail inflation has dropped to 5.66 per cent in March from 6.44 per cent in February.
Top News
Latest News
