News Brief
Food inflation
Retail inflation in India rose to a 14-month peak of 6.21 per cent in October, driven largely by rising prices of essential food items, including fruits, vegetables, meat, fish, and oils, as per data from the National Statistical Office (NSO) released on Tuesday (12 November).
Food inflation, based on the Combined Food Price Index (CFPI), reached a 15-month high of 10.87 per cent in October, up from 9.24 per cent in September and 6.61 per cent in the same period last year.
This jump in food inflation marked the first double-digit rate since July 2023, as highlighted in the NSO's report. October's inflation figure pushed the headline retail inflation rate above the Reserve Bank of India's (RBI) target range of 4 per cent (+/- 2 per cent) for the second straight month.
This increase, anticipated by RBI Governor Shaktikanta Das last week, reduces the likelihood of an immediate rate cut at the RBI's December monetary policy meeting.
Inflation for perishables like vegetables rose to 42.18 per cent from 35.99 per cent, and for fruits, it increased to 8.43 per cent from 7.65 per cent. Other categories also saw hikes like cereals, meat and fish and oils and fats, reflecting global edible oil price pressures and import-driven inflation.
Housing inflation also ticked up to 2.81 per cent from 2.78 per cent in September. "High food inflation, especially due to escalating prices in vegetables and edible oils, is concerning," said Rajani Sinha, Chief Economist at CareEdge Ratings.
She noted that unseasonal rains and extended monsoons likely contributed to the surge in prices for items like tomatoes and onions. Increased global edible oil prices and higher customs duties have also impacted food costs, underscoring the need for supply-side measures to stabilize prices, she added.