India’s retail inflation rose to the highest in more than six years due to high food prices. According to data from the Consumer Price Index (CPI) published by the Ministry of Statistics and Program Implementation, inflation stood at 7.61% in October, the highest since May 2014. Retail inflation registered 7, 27% in September, according to data. The consumer food price index (CFPI) jumped to 11.07% in October, up from 10.68% in September.
In October, meat and fish inflation rose to 18.7% while vegetable prices rose to 22.51%. Inflation for clothing and footwear stood at 3.17% in October.
“Food prices do not appear to moderate contrary to previous expectations, and from only fruits and vegetables, the price increase has also carried over to all major food components. This may have an impact on the trajectory of interest rates, and the RBI may have continue to focus on liquidity provision rather than rate action. It is also a fact that the economy is going through unprecedented economic developments and therefore a growth can be expected. relatively higher price level. But persistently high inflation could invite RBI action through even reducing free liquidity, “said Joseph Thomas, research director at Emkay Wealth Management.
“The PII is almost flat at 0.20%, from a deeply negative number for the period before an economic recovery is currently taking place, but the price level is also rising. To sustain initial gains in the recovery, the Control of the price level is critical, “added Thomas.
The Reserve Bank of India, which primarily takes retail inflation into account while reaching key policy rates, has been mandated by the government to keep inflation at 4 percent (+, – 2%).
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