CPI jumps to 4.62% in October; breaches RBI’s medium-term target of 4%

Breaching the Reserve Bank of India's (RBI) medium-term target of 4% for the first time since July 2018, India’s retail inflation based on Consumer Price Index (CPI) quickened to 16-month high of 4.62% in October from 3.99% in September 2019 on the back of higher food prices. This is the third straight month of rise in CPI. The earlier high was reported in June 2018 when the retail inflation print was recorded at 4.92%. Inflation in the food basket spiked to 7.89% in October 2019, against 5.11% the previous month, mostly due to surge in vegetable prices.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the CPI (Rural, Urban, Combined) on Base 2012=100 for October 2019, stood at 4.29%, 5.11% and 4.62%, respectively, compared to 2.82%, 4.04% and 3.38%, respectively in October 2018. The index value of CPI for combined stood at 147.2. The data also showed that consumer food price index (CFPI) for all India Rural and Urban for October 2019 stood at 6.42% and 10.47%, respectively, compared to -0.65% and -1.15%, respectively in October 2018. The index value of CFPI for combined stood at 149.1 for the month of October.

Besides, inflation in vegetables spiked to 26.10% from 5.40% in September, while for fruits it jumped to 4.08% from 0.83%. Likewise, the prices of cereals, meat and fish, eggs grew at faster pace of 2.16%, 9.75% and 6.26%, respectively. For pulses and related products, retail inflation rose to 11.72%. However, the prices of fuel and light category continued to witness downward move at (-) 2.02% as against (-) 2.18% a month earlier. Meanwhile, inflation in housing stood at 4.58% for October, while it was 1.65% in clothing and footwear.