- By Aditya Pratap Singh
- Wed, 13 Nov 2024 09:07 AM (IST)
- Source:JND
Retail inflation hit a 14-month high of 6.21 per cent in October, breaching the Reserve Bank of India's tolerance level, mainly due to an increase in food prices, according to official data released on Tuesday. The Consumer Price Index (CPI)-based inflation stood at 5.49 per cent in September and 4.87 per cent a year ago.
Retail inflation has been below the RBI's upper tolerance level of 6 per cent since September last year. It had stood at 6.83 per cent in August 2023.
The RBI, which mainly factors in the CPI while arriving at its bi-monthly monetary policy, has been mandated by the government to ensure that retail inflation remains at 4 per cent with a margin of 2 per cent. Food inflation rose to 10.87 per cent in October, as compared to 9.24 per cent in September and 6.61 per cent in October 2023, data released by the National Statistical Office (NSO) showed.
The year-on-year inflation rate based on the All India Consumer Price Index (CPI) for the month of October 2024 stood at 6.21 per cent. The corresponding inflation rates for rural and urban areas were 6.68 per cent and 5.62 per cent, respectively, the NSO said.
The rise in inflation in October 2024 is mainly on account of an increase in the prices of vegetables, fruits oils and fats, the NSO added.
ICRA chief economist Aditi Nayar said CPI inflation rose sharply to a 14-month high in October 2024, breaching the upper limit of the MPC's medium-term target of 2-6 per cent. She said the sequential increase in inflation was mainly led by the food and beverages segment, followed by a marginal uptick in core articles.
Nayar further said retail inflation has breached the tolerance level of 6 per cent and is expected to be at least 60-70 basis points higher than the MPC's forecast for Q3 FY25. The RBI had kept the key short-term lending rate unchanged after the last monetary policy review in October, citing concerns on the inflation front.
(With Agencies Input)