At 0.3%, retail inflation hits record low in October
NEW DELHI: Retail inflation cooled to a record low in Oct on the back of the impact of GST rate cut and sharp slide in food prices, triggering hopes of a cut in interest rates by the Reserve Bank of India (RBI) in Dec. Data released by the National Statistics Office (NSO) on Wednesday showed retail inflation, as measured by the consumer price index (CPI), eased to 0.3% in Oct, below the 1.4% in Sept and lower than the 6.2% in Oct last year. There is a decrease of 119 basis points in the inflation in Oct, compared to Sept. It is the lowest year-on-year inflation of the current CPI series.
Food inflation entered the deflationary zone, contracting 5% in Oct and there is a decrease of 269 basis points in food inflation during the month, compared to Sept. The food inflation in Oct is the lowest of the current CPI series. The data also showed rural inflation rate contracted 0.3% while urban was higher at 0.9%. “The decline in headline inflation and food inflation during the month of Oct is mainly attributed to the full month’s impact of decline in GST, favourable base effect and to drop in inflation of oils and fats, vegetables, fruits, egg, footwear, cereals and products, transport and communication,” said an official statement. Vegetable inflation contracted 27.6% in Oct while pulses and products inflation fell 16.2%. Onion inflation was down 54.3% while tomato inflation fell 42.9% and potato contracted 36.7%.
