Retail inflation rose to 4.62% in October, breaching the Reserve Bank of India’s medium-term target of 4% for the first time since July 2018, showed government data released on Wednesday. This increase was driven by rising prices of vegetables.
Retail inflation, measured using the Consumer Price Index, in rural areas stood at 4.29%, and at 5.11% in urban areas. The Consumer Food Price Index of inflation stood at 7.89%, compared to 5.11% the month before. Food prices rose 6.42% in rural areas and 10.47% in urban areas.
In urban areas, vegetables were 35.42% costlier, while in rural areas, the prices increased 21.07%. Disruption in supply of onions after floods in states such as Maharashtra in August caused prices touching Rs 80 per kg in some parts of the country. The Centre has banned its exports and put stock limits for local traders. According to government data, prices of meat and fish rose 10.28% in urban areas and 9.49% in rural areas. Food and beverages overall became 5.78% costlier in rural areas in October while in urban areas the inflation rate was 8.97%.
However, rising inflation is unlikely to make the Reserve Bank of India cut policy rates in its monetary policy review meeting next month, Mint reported, even as a set of macro-economic data pointed towards faster deceleration of the economy.