You are here: Home » Economy & Policy » News
Business Standard

October retail inflation touches 7-month high, vegetable prices soar

Grew at 3.58%, mainly due an increase in prices of consumer food items

Indivjal Dhasmana  |  New Delhi 

October retail inflation touches 7-month high

Consumer Price Index (CPI)-based rose to this financial year’s highest rate of 3.58 per cent in October, from 3.28 per cent in September, food and fuel increasing at a higher pace. This could stop the of India (RBI) from cutting in its policy review next month to spur falling industrial growth even as core (relating to manufactured products sans food items) fell to 4.55 per cent, from 4.61 per cent. However, in various household goods and services declined, implying the goods and services tax (GST) did not have much impact. The GST Council’s recent decision to cut the on around 200 items is likely to further dampen the rate of price rise of these items. Food moved up to 1.9 per cent in October, from 1.25 per cent in September. The main reason was vegetable prices, with in these up from 3.92 per cent to 7.4 per cent. Onions and tomatoes appear the main causes. Elsewhere among food items, moved in a narrow range.

Pulses continued to show a fall in at a higher pace, of 23.1 per cent, compared to 22.5 per cent in September. in fuel and light was up at 6.36 per cent, from 5.56 per cent as global crude oil rose and despite the cut in excise duty. The average price of the Indian basket of crude oil rose to $56.06 a barrel in October, from $54.52 in September. October retail inflation touches 7-month high in household goods and services such as health, transport and communication, recreation & amusement, and education declined in October. The had projected to rise to 4.2-4.6 per cent in the second half (H2) of the financial year (October to March). The rise in the Index of Industrial Production fell to 3.8 per cent in September, from 4.2 per cent in August. “With the expected to track a rising trend over H2 FY18 and print at around 4.5 per cent in March 2018, there is a low likelihood of rate in the immediate term. We expect an extended pause amid non-unanimous voting by the MPC in the December 2017 policy review,” says Icra Principal Economist Aditi Nayar.

First Published: Tue, November 14 2017. 08:31 IST