Retail inflation cools to 6.77% in October from 7.41% in September

Retail inflation slips below the 7% mark for the first time in three months

India’s retail inflation cooled to 6.77% in October from 7.41% in September, slipping below the 7% mark for the first time in three months and only the second time since April’s eight-year high mark of 7.8%.

This is the tenth month in a row that inflation has been over the 6% upper tolerance threshold mandated for the Reserve Bank of India (RBI). The central bank’s Monetary Policy Committee met earlier this month to deliberate on the explanation to be sent to the government for it inability to meet the target for three successive quarters.

Rural consumers continued to face 7% inflation in October, slightly lower than the 7.6% in September, while urban India consumers’ price rise eased to 6.5% from 7.3% in the previous month.

Inflation measured by the Consumer Food Price Index moderated from 8.6% in September to 7% in October, but rural households faced 7.3% inflation while the same rate was 6.5% for their urban counterparts.

On a sequential basis, the Consumer Price Index was 0.8% higher in October compared to September, while the Consumer Food Price Index was up 1.1%.

Cereals inflation remained sticky, rising from 11.53% in September to 12.1% in October, with rural India facing nearly 12.7% inflation. Similarly, vegetables inflation dropped sharply to 7.8% from 18.05% in September, with urban and rural consumers seeing prices rise 6.6% and 8.45%, respectively.

Inflation in clothing and footwear, which has been over 8% since last December, remained virtually unchanged around 10.2%, with footwear price inflation staying over 12%.