Retail inflation eases to 6.77% in October

India’s retail inflation softened to a three-month low at 6.77 per cent in October from 7.41 per cent in September as food prices declined substantially.

The easing in price pressure may turn the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) less hawkish when it meets next month even though a pause in the ongoing rate hike cycle is unlikely.

The data released by the National Statistical Office on Monday showed food inflation eased to 7.01 per cent from 8.6 per cent in September due to a decline in prices of vegetables, fruit, pulses, and edible oil.

Services inflation, which includes items like health, education, transport and communication, recreation and personal care, eased to a 29-month low at 5.9 per cent.

Reacting to the latest inflation numbers,



the finance ministry said the measures taken by the government to rationalise tariff structures of major inputs to augment domestic supplies helped to keep cost-push inflation in consumer items in control.

“The impact of these measures is expected to be felt more significantly in the coming months,” it tweeted.

Sunil Kumar Sinha, principal economist at India Ratings, said while the decline in inflation was good news for the economy, a continuous increase in cereals inflation (12.08 per cent) was not so for households at the bottom of the income pyramid because they spent a large share of their income on food products.

“Cereals and product inflation has been in excess of 5 per cent since March 2022 and in double digits in the past two months,” he added.