New Delhi, Nov 12 (IANS) India’s retail inflation, based on the new Consumer Price Index (CPI) series, rose to 6.09 per cent in October this year compared to the same month of the previous year to cross the RBI’s upper limit for the first time after two years, according to data released by the Ministry of Statistics on Thursday.
Overall food inflation in October stood at 8.94 per cent as the prices of onions shot up by 116.22 per cent while garlic turned costlier by 60.74 per cent. Ginger and lemon prices also rose by 48.32 per cent and 47.30 per cent, respectively, during the month.
On the other hand, potato prices fell by 14.24 per cent during the month, while cauliflower and coconut turned cheaper by 10.57 per cent and 5.6 per cent, respectively, in October compared to the same month of the previous year.
Silver jewellery was among the commodities that posted the highest inflation during the month, with prices surging as much as 52.39 per cent.
The CPI inflation has breached the upper limit of the RBI safe zone, raising expectations of a rate hike by the RBI in the next monetary policy review. The tolerance zone of the RBI ranges from 2 per cent to 6 per cent. The RBI’s monetary policy aims to keep inflation within this zone as it balances its objective of promoting economic growth with stability.
The monetary policy committee voted unanimously to increase the policy repo rate by 25 basis points to 5.5 per cent on October 7. Acceleration of inflation in key economies has prompted a shift towards hawkish monetary policy. The US Fed hiked by 25 bps in September.
RBI Governor Sanjay Malhotra said in the monetary policy statement on October 7 that CPI inflation increased to 4.8 per cent in August 2026 from 4.5 per cent in July. While the increase had been predominantly on account of higher inflation in food and fuel groups, core inflation has also picked up, indicating some signs of widening price pressures. Food price increases have become more broad-based, along with notable spikes in certain items such as sugar and onion. The uptick in fuel inflation in August largely reflected unfavourable base effects. Core inflation increased to 4.2 per cent and core inflation, excluding precious metals, increased to 2.9 per cent in August. The weighted share of items in headline CPI recording inflation above 4 per cent increased steadily to about 37 per cent in August.
The near-term outlook on inflation points towards continued pressures from the supply side on account of the deficient monsoon, ongoing El Nino conditions and high energy and other commodity prices, the pass-through of which is still continuing. Considering all factors, CPI inflation is projected to be 5.2 per cent for 2026-27, with Q2 at 4.9 per cent; Q3 at 6.0 per cent; and Q4 at 5.7 per cent. Inflation for Q1:2027-28 is projected at 5.6 per cent with risks being evenly balanced. Core inflation is projected at 4.4 per cent for 2026-27.
–IANS
sps/vd
