New Delhi, (Asian independent) Lower food prices eased India’s September retail inflation on both a sequential and year-on-year basis.
Data furnished by the National Statistical Office showed that the Consumer Price Index (CPI) slipped to 4.35 per cent last month from 5.30 per cent in August 2021.
Even on YoY basis, the rise in last month’s retail inflation was slower than 7.27 per cent acceleration recorded for September 2020.
The macro-economic data assumes significance as it brings retail inflation mark well within the range of the Reserve Bank of India’s set target of 2-6 per cent for CPI inflation.
The declining retail inflation rate increases the chance of the RBI to further loosen up the monetary policy and maintain the accommodative stance.
Region wise, the CPI Urban fell to 4.57 per cent last month from 5.32 per cent in August, and the CPI Rural came down to 4.13 per cent from 5.28 per cent.
As per the NSO data, the rate of rise in Consumer Food Price Index decreased to 0.68 per cent last month from 3.11 per cent in August.
The CFPI readings measure the changes in retail prices of food products.
In terms of CPI YoY inflation rate, pulses and products’ prices jumped by 8.75 per cent in September 2021.
Besides, meat and fish prices rose by 7.99 per cent, eggs became dearer by 7.06 per cent, and the overall price of food and beverages category was up 1.61 per cent.
However, vegetable prices declined by 22.47 per cent.
Furthermore, as per the official data, the inflation rate for fuel and light was at 13.63 per cent.
ICRA’s Chief Economist Aditi Nayar said: “While the extent of the fall in the YoY CPI inflation to 4.35 per cent in September 2021 from 5.3 per cent in the previous month is considerable, and higher than our forecast, it has been driven primarily by food items, and to a small extent, housing.”
“Other sub-sectors recorded a flat or higher inflation reading in September 2021, which is a concern given the looming sceptre of rising energy, metals and logistical costs. A high base is expected to temporarily dampen the CPI inflation for October-November 2021 to below 4 per cent, before an upturn resumes in the remainder of this fiscal.”
India Ratings and Research’s Principal Economist Sunil Kumar Sinha said: “The food inflation has now cooled off to a four months low. The relief on food front has mainly come from cereals and fruits and vegetables prices.”
“Core inflation also saw moderation to an eight-month low of 5.7 per cent in September 2021. High crude oil prices and hike in LPG cylinder rates is expected to keep fuel prices at the elevated levels.”