Retail Inflation Declines To A 3-Month Low Of 6.77% In October From 7.41% In September

The headline retail inflation rate in India declined to a three-month low of 6.77 per cent in October from 7.41 per cent in the previous months on a favourable base effect, according to data released on Monday by the ministry of statistics and programme implementation revealed.

The latest Consumer Price Index (CPI) inflation at 6.77 per cent is broadly along expected lines. The Reserve Bank of India (RBI) also expected inflation to decline. Governor Shaktikanta Das on Sunday at an event said the central bank saw CPI inflation falling below 7 per cent in October. Despite the sizeable drop in inflation in October, the rate remains above the 6 per cent upper limit of the RBI’s 2-6 per cent tolerance band.

On November 3, the RBI’s Monetary Policy Committee (MPC) convened for the first time since the monetary policy framework came into effect about six years ago, an out-of-sequence meeting to debate and produce the report that would be given to the government for failing to uphold the inflation mandate. The public has yet to be given access to more information about the conference.

According to a separate report, Morgan Stanley expects India’s retail inflation to track within the RBI’s target band by March 2023.

Meanwhile, the wholesale price-based inflation (WPI) also declined to a 19-month low of 8.39 per cent in October, on easing prices of fuel and manufactured items, according to a release by the government on Monday. This is the first time in 19 months that WPI inflation print has come in single digit. The last was in March 2021 at 7.89 per cent.

According to the release, decline in the rate of inflation in October, 2022 is primarily contributed by fall in the price of mineral oils, basic metals, fabricated metal products, except machinery, and equipment; textiles; other non-metallic mineral products, minerals etc.