News Brief
India’s Retail Inflation Hits Eight-Year Low At 1.54 Per Cent In September: Report
Representative Image
India’s retail inflation cooled to an eight-year low of 1.54 per cent in September, driven by a sharp decline in food prices, government data showed on Monday (13 October), Reuters reported.
The reading was down from 2.07 per cent in August and below a Reuters poll estimate of 1.7 per cent, marking the lowest level since June 2017.
The figure has now fallen below the Reserve Bank of India’s (RBI) tolerance band of 2 per cent–6 per cent for the second time in three months, after dipping below 2 per cent in July.
The RBI is mandated to prevent inflation from breaching this range for more than three consecutive quarters.
Food prices saw a 2.28 per cent year-on-year drop in September compared to a 0.64 per cent fall in August.
Vegetable prices, in particular, plummeted 21.38 per cent following a 15.92 per cent decline in the previous month.
Meanwhile, Prime Minister Narendra Modi’s tax cuts on consumer goods, from soaps to cars, are expected to cushion the impact of the US tariffs of up to 50 per cent on Indian exports and sustain festive-season demand.
So far this year, the RBI has reduced interest rates by 100 basis points and raised its GDP growth forecast to 6.8 per cent from 6.5 per cent, the upper end of the government’s 6.3 per cent–6.8 per cent estimate.
At this pace, India remains the fastest-growing major economy, with inflation comfortably below target and growth on a steady upward path.
