Retail inflation cools to 3.31%, lowest in a year in October

Vegetable prices fell by 8.06% in October against a 4.15 per cent contraction in September

Retail inflation rate fell to a one-year low of 3.31 per cent in October on the back of cheaper kitchen staples, fruits and protein-rich items, data released on Monday showed. The inflation remained below the four per cent mark, the average of the range that the Reserve Bank of India (RBI) is statutorily mandated to keep the inflation, for the third month in a row now. 

The inflation, based on the Consumer Price Index (CPI), was 3.7 per cent in September this year and 3.58 per cent in October 2017. The retail inflation number is the lowest since September 2017 when it touched 3.28 per cent. 

Food items saw fall in prices at 0.86 per cent in the month compared to 0.51 per cent inflation in the previous month, showed an official release. 

Experts believe the monetary policy committee may retain the policy rate in its meeting next month despite core inflation (inflation minus food and fuel) showing some signs of concern. 

Vegetable prices fell by 8.06 per cent in October against a 4.15 per cent contraction in September. Inflation also slowed to 0.35 per cent in the fruit basket as against 1.12 per cent recorded a month ago. 

However, inflation quickened to 8.55 per cent for the “fuel and light” category against 8.47 per cent in the previous month.  

In non-food items, fuel inflation rose to 8.55 per cent in October against 8.47 per cent in September. 

However, core  inflation remained in excess of 5.3 per cent since November, 2017, said Devendra Pant, chief economist at India Ratings, adding this would make RBI's job difficult. 

“We believe the RBI may remain in pause mode in its forthcoming MPC meeting in view of the conflicting trends of different segments of CPI,” he said.