Newsletter
India’s retail inflation rose to 6.09% in October, crossing the RBI’s upper limit of 6% for the first time in two years.
What drove the rise: food prices were the biggest factor. Food inflation climbed to 8.94% from 7.74% in September, with essentials such as onions, garlic and ginger becoming more expensive.
Food accounts for nearly 40% of the basket used to measure retail inflation, so rising grocery bills can significantly push up the overall figure.
Food prices rose faster in rural areas, where inflation reached 9.09%, compared with 8.68% in urban areas, according to provisional October data.
Beyond the kitchen:
- Restaurants and accommodation: inflation increased to 10.06% from 9.36%.
- Clothing and footwear: 4.96%, up from 3.93%.
- Housing: 2.90%, up from 2.74%.
- Healthcare: 2.05%, up from 1.40%.
- Information and communication: 3.16%, up from 2.44%.
Inflation in personal care and other miscellaneous goods and services slowed to 10.14% from 13.75%. That means prices were still rising, but at a slower pace.
What happens next: the RBI targets inflation of 4%, with an acceptable range of 2-6%. October’s reading is above that range, but one month alone does not count as a formal failure. That happens when average inflation stays outside the range for three consecutive quarters.
The RBI will watch whether this rise fades or spreads to more goods and services.
Could food get costlier: weak rainfall and a possible El Niño weather pattern could hurt harvests and tighten supplies, keeping some food prices high. Much will depend on how weather conditions and crop production develop.
