India’s Retail Inflation Climbs to 6.21% in October Amid Vegetable Price Surge
India’s retail inflation reached 6.21% in October 2024, mainly due to a significant vegetable price surge. This rise marks a sharp increase from the 5.49% recorded in September, driven largely by a vegetable price hike of 42.18%. The delayed monsoon season in India resulted in crop damage, reducing supply and causing higher vegetable prices, contributing to the overall inflationary pressure.
In addition to the vegetable price surge, the India inflation rate was impacted by other factors, including a 9.51% increase in edible oil prices. The overall food price index rose by 10.87%, putting additional strain on household budgets. However, certain food categories, like pulses, eggs, and sugar, saw price reductions, helping to offset some of the inflationary pressures.
Housing inflation also saw a slight increase, rising to 2.81% in October from 2.72% in September. Meanwhile, the electricity price index recorded a minor increase of 5.45%.
The Reserve Bank of India (RBI) has been closely monitoring inflation, as the current rate surpasses its upper limit of 6%. While the RBI aims to bring inflation down to 4%, an interest rate cut is unlikely in the immediate future, according to RBI Governor Shaktikanta Das. The Governor emphasized that cutting rates at this stage could be risky, given the persistent vegetable price surge and other inflationary pressures.
The current inflation trends highlight the need for policies to address food price stability in order to maintain broader economic stability. As vegetable prices continue to rise, controlling India’s inflation will remain a significant challenge for policymakers.
