New Delhi: The common man has reason to cheer as both retail and wholesale price inflation cooled in October. The country's retail inflation, which is measured by the Consumer Price Index or CPI, fell to a three-month low of 6.77 per cent in October, down from 7.41 per cent in September. But the retail inflation was at 4.48 per cent in October 2021.The wholesale inflation for last month eased to 8.39 per cent year-on-year, the lowest since March 2021, two separate government data showed on Monday.
However, the CPI print is still above the Reserve Bank of India's (RBI's) tolerance band of 2-6 per cent for the 10th consecutive month. In line with the data, the RBI governor last week had projected that the key CPI inflation would be below 7 per cent in October. The Centre has mandated the central bank to maintain retail inflation within the tolerance band for a five-year period ending March 2026.
Despite the easing inflation, the central bank is expected to deliver another 50 basis points rate hike to 6.40 per cent by end-March, a Reuters poll suggested.
As per the data released by the National Statistical Office (NSO), the inflation in the food basket was 7.01 per cent in October against 8.6 per cent in September.
The commerce ministry also released a separate data, saying that India's annual Wholesale Price Index (WPI) inflation for October 2022 eased to 8.39 per cent. "The October WPI inflation was lower than 10.70 per cent recorded in the previous month of September 2022. This is the first time in 19 months that WPI inflation print has come in single digit. The last was in March 2021 at 7.89 per cent," the ministry said.
As per the data, food articles inflation rose to 8.33 per cent from 0.06 per cent in October 2021. Similarly, inflation in vegetables rose to 17.61 per cent from -17.45 per cent a year ago. However, the manufactured products inflation stood at 4.42 per cent, down from 12.87 per cent a year ago. Fuel and power inflation eased to 23.17 per from 38.61 per cent. Inflation in primary articles stood at 11.04 per cent, up from 7.38 per cent.
"Decline in the rate of inflation in October, 2022 is primarily contributed by the fall in the price of mineral oils, basic metals, fabricated metal products among others, except machinery and equipment; textiles; other non-metallic mineral products; minerals etc," the ministry added.
"In the recent months, multiple factors have been adding inflationary pressure in the economy such as demand recovery, rupee depreciation, crop damages due to extended monsoon increasing the food prices etc," said Vivek Rathi, director-research, Knight Frank India.
"Currently, India's domestic macroeconomic fundamentals are strong compared to its global peers. The sustenance of domestic demand provides enough cushioning for the RBI to continue with its rate hikes to control inflation. However, we are cautious of the price pressure that could emanate from external factors resulting in sharp rupee depreciation and effects on the Indian economy," Rathi added.
