At 5.49%, retail inflation hits 9-month high in Sept

Driven by sharp increase in food prices, India’s retail inflation rose to its highest level in 2024. The All-India Consumer Price Index (CPI) inflation for September 2024 increased to 5.49 per cent from August’s 3.65 per cent, according to the data released by the Ministry of Statistics and Programme Implementation on Monday. Earlier in December 2023, retail inflation had stood at 5.69 per cent.

Data showed that food inflation rose sharply to 9.2 per cent in September from 5.66 per cent in the preceding month. This sharp uptick was led by an acceleration in the prices of vegetables (35.99 per cent) and fruits (7.65 per cent).

WPI rises to 1.84%

• Wholesale price index (WPI) increased from 1.31% in August to 1.84% in September.
• Food articles inflation rose from 3.11% to 11.53%. The prices of vegetables rose; prices of fruits, pulses, cereals & paddy dropped.
• Other indices like fuel, power & manufactured products saw deceleration.

Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares and Stock Brokers, said, “India’s CPI for September rose to 5.49 per cent. The RBI had projected the quarterly average at 4.1 per cent in its last monetary policy committee, thus expecting the September-2024 CPI around 5 per cent.”

“The current rise is attributed to the increased prices of vegetables which went up 36 per cent year-on-year. With normal monsoon, we expect fresh supplies to hit the market in coming days and the food prices to remain moderate,” added Hajra.

“The headline inflation is likely to range around 4.5-5 per cent in the next couple of months, above the RBI’s target of 4 per cent. Thus, the RBI may still hold the repo rate steady and watch closely the food price trajectory and geopolitical events,” he said.

Meanwhile, the housing sector in urban areas experienced a year-on-year inflation rate of 2.78 per cent, a slight increase from the previous month’s rate of 2.66 per cent. The All-India Electricity index reached 162.5 and the inflation rate stood at 5.45 per cent.