Retail inflation hits 6.21% in October, exceeds RBI's upper tolerance limit

PTC Web Desk: India's retail inflation rate for October reached 6.21 per cent, exceeding the Reserve Bank of India’s (RBI) upper tolerance threshold of 6 per cent. The Ministry of Statistics and Programme Implementation released the figures on Tuesday, showing that food inflation stood at a significant 10.87 per cent, with vegetable inflation surging to 42.18 per cent.

Inflation rates for rural and urban areas were recorded at 6.68 per cent and 5.62 per cent, respectively. The year-on-year housing inflation for October 2024 rose slightly to 2.81 per cent, compared to 2.72 per cent in September. The housing index reflects data for the urban sector only.

Despite high food inflation, certain subgroups saw declines, including pulses and products, eggs, sugar and confectionery, and spices. The spike in food prices was primarily driven by inflation in vegetables, fruits, and oils and fats.

Back in August, retail inflation had dropped to 3.65 per cent, marking the second-lowest level in five years, but has been on an upward trend since. Policymakers continue to face challenges as they aim for a sustainable 4 per cent inflation target. The current data underscores that this goal remains elusive.

Inflation is a global concern, affecting even advanced economies, but India has managed its trajectory relatively well. Retail inflation eased in most months this year, except June, following the RBI’s consistent decision to maintain the repo rate at 6.5 per cent for the ninth consecutive time. The repo rate is the rate at which the RBI lends to commercial banks. Attention now shifts to the Kharif harvest season and the progress of rabi sowing, which will be critical for future inflation trends.