India’s October retail inflation rose on higher food, input prices.
India’s October retail inflation rose on a sequential basis, driven by higher fuel and commodity prices as well as a marginal increase in food prices. Accordingly, data presented by the National Statistics Office showed that the Consumer Price Index (CPI) rose to 4.48 per cent last month, from 4.35 per cent in September 2021.
However, on a YoY basis, last month’s growth in retail inflation was slower than the 7.61 per cent growth recorded in October 2020.
Macro-economic data assumes significance as retail inflation remains within the range of RBI’s target of 2-6 per cent for CPI inflation.
Sector-wise, CPI urban increased to 5.04 per cent from 4.57 per cent in September last month and CPI rural declined to 4.07 per cent from 4.13 per cent.
According to NSO data, the rate of growth in the Consumer Food Price Index rose to 0.85 per cent last month, from 0.68 per cent in September.
CFPI readings measure changes in the retail prices of food products. In terms of CPI YoY inflation rate, prices of pulses and products increased by 5.42 per cent in October 2021.
In addition, the prices of meat and fish increased by 7.12 per cent, although eggs became cheaper by 1.38 per cent, yet, the overall price of food and beverages rose by 1.82 per cent and that of oils and fats by 33.50 per cent.
At the same time, a fall of 19.43 per cent was recorded in the prices of vegetables.
Further, as per official data, the inflation rate of fuel and light stood at 14.35 per cent. Besides, the clothing and footwear sub-group showed a price rise of 7.53 per cent.
Madhavi Arora, Lead, said, “Despite the base effect, inflation is still likely to rise above 6.2 per cent despite higher fuel costs, input cost pressures and seasonal changes in some food prices in the coming months, etc.” Economist, Emkay Global Financial Services.
“We revise our forecast for FY12 by 25 bps to 5.5 per cent, as we expect supply-side bottlenecks, higher imported commodity inflation and higher pump prices to create an upside pressure on inflation.”
According to Aditi Nair, Chief Economist, ICRA, “Year-on-year CPI inflation growth in October 2021 over the previous month, while mild, was fairly broad-based, with inflation tightening for clothing and footwear and miscellaneous items.” with. This suggests that revived demand is pushing producers in some sectors to pass on input price pressures, resulting in core inflation rising to 5.8 per cent for that month.”
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