India's retail price inflation slows down in October

15 Nov 2022 , 08:58 AM

India’s retail price inflation slowed down to 6.77% in October, from 7.41% in September. This reading is on a year-on-year basis. On month-on-month basis, retail inflation stood at 0.80%. On month-on-month basis, retail inflation in September was 0.57%. Food inflation in October came down to 7.01% from 8.6% in September. Vegetable prices in October 2022 were up by 7.7% from those in October 2021. Fuel and light inflation in October stood at 9.93%. This was lower than 10.39% in September. Wholesale price inflation stood at 8.39% in October. This is the first time in 19 months that wholesale price inflation has come down to single digit figure.

Easing of inflation in October indicates that RBI will become less agressive with regard to future interest rate hikes. As India enters the year before the general elections, the Government may also increase pressure on RBI to become more moderate with regard to interest rate hikes. Much of India’s inflation is due to supply chain disruptions caused by Covid lockdowns and the higher price of fuel. Higher price of fuel increases the cost of transportation of everything, from vegetables to eggs to other goods. This then gets reflected in the form of higher prices.