Good news in festivals: Retail inflation reaches five-month low, vegetable prices fall by 22%

Before the festive season, there is good news for the government and the general public. Retail inflation fell to its lowest in five months in September. Retail inflation, which stood at 5.3% in August, fell to 4.35% in the previous month. This information has been received from the data released by the government. According to government data, the prices of vegetables fell by 22%.

Food inflation fell to 0.68% in August at 3.11%

The best part is that inflation in food items has also come down in September. Food inflation, which stood at 3.11% in August, came down to 0.68% in the previous month. In this way, for the third consecutive month, the retail inflation rate has been in the Reserve Bank’s comfort zone ie 2% to 6% (4% to 2% above or below).

22% sharp fall in the price of vegetables

Vegetables prices declined 22% while food and beverages segment inflation rose 1.01%. Inflation in the fuel and light category was at an all-time high of 13.63%. In the recent monetary policy meeting, RBI had reduced the inflation forecast for this fiscal from 5.7% to 5.3%.

RBI’s focus was also on growth in the monetary policy review of October 8

Significantly, even in the monetary policy review of October 8, RBI’s focus was on growth. Therefore, there was no change in the policy rate from his side. It has kept the repo rate (the rate at which banks take loans from it) as before at 4% and the reverse repo rate at 3.35%.

There is increasing concern about the situation of stagflation around the world.

Sakshi Gupta, Senior Economist, HDFC Bank, says, “Inflation is looking good, but there is a growing concern about a stagflation situation around the world.”

Risk of a sharp jump in inflation if the base effect ends from December

According to Gupta, “The effect of energy shortfall and rise in crude prices is already visible on the production and prices of other commodities. When the base effect starts to wear off from December, there will be a risk of a sharp jump in inflation.

Industrial production improves in August, IIP rises to 11.9% from 11.5% in July

Meanwhile, industrial production in August has improved. IIP increased to 11.9% in August from 11.5% in July. In August last year, the IIP was negative at 7.1%. The manufacturing sector produced 9.7% in August, while the 23.6% in mining saw a 16% jump in power generation.