Retail Inflation In India Eases To 5.02 Per Cent In September, Lowest In Three Months

The inflation has come back to the Reserve Bank of India (RBI)'s comfort level of below 6 per cent after a gap of two months

The consumer price index (CPI)-based inflation for the month of September eased to 5.02 per cent as against 6.83 per cent in August, the lowest in three months, according to the data released by the National Statistical Office (NSO) on Thursday. 

The inflation has come back to the Reserve Bank of India (RBI)'s comfort level of below 6 per cent after a gap of two months. It was at 7.56 per cent in September 2022. Food inflation fell to 6.56 per cent in September against 9.67 per cent in August. 

The Reserve Bank of India's (RBI) latest forecasts, released on October 6 MPC, had implied an inflation reading of 4.8-5 per cent for last month.

Rural inflation was on the higher side at 5.33 per cent, compared to urban inflation at 4.65 per cent in September. The inflation rate for September for cereals and products was 10.95 per cent, meat and fish 4.11 per cent, milk and products 6.89 per cent, fruits 7.3 per cent, vegetables 3.39 per cent.

Akhil Mittal, senior fund manager (Fixed Income) at Tata Asset Management, said, "Consumer Price Inflation (CPI) yoy came in at 5.02 per cent, lower than market expectation of 5.30 per cent-5.40 per cent. Within CPI, the food inflation continues to be high at 6.56 per cent with pulses and cereals remaining high. Core inflation has come-off further at 4.5 per cent and this bodes well for future inflation expectations and also provides comfort to RBI w r t probability of meeting inflation trajectory. I think this would be positive for markets and provide breather to yields, which were headed higher since MPC review further fueled by geo-political developments. Overall positive for markets."

The price data are collected from selected 1,114 urban markets and 1,181 villages covering all states and UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster. During the month of September 2023, the NSO collected prices from 99.8 per cent villages and 98.3 per cent urban markets, while the market-wise prices reported therein were 88.7 per cent for rural and 92.0 per cent for urban.