Inflation cools down in September, but the pressure is building up

Crop damage and import constraints could cause food prices to spike; the global energy scenario is already taking a toll on domestic fuel prices

Though the retail price inflation rate fell to a five month-low of 4.35 per cent in September, concerns were raised by several reputed agencies, from the International Monetary Fund (IMF) to Nomura, and by corporates over inflationary pressure.

In fact, wholesale price inflation also came down in September to the level seen in April, but remained elevated at 10.7 per cent. The high wholesale price inflation was partly due to a low base effect of 1.3 per cent in September 2020.

Asked why the IMF has flagged the issue of inflation at a time when the retail price rise was