India’s retail inflation surged to 6.21% in October 2024, significantly breaching the Reserve Bank of India’s (RBI) target range of 2-6%. Escalating food prices have largely driven the rise, marking a notable increase from last month’s inflation rate of 5.49% and up from 4.87% a year ago. This inflationary pressure presents a challenge for the RBI, which recently maintained the key policy repo rate at 6.5% despite inflationary concerns.
According to the National Statistics Office (NSO), food inflation saw an increase of 10.87% year-on-year, with vegetable prices particularly hard-hit, soaring by a staggering 42.18%. Oils, fats, and fruits also contributed, with increases of 9.51% and 8.43%, respectively. This sharp inflation in food items contrasts with spices, which saw a decrease of 7.01%, providing some relief to consumers.
Geographically, inflation was highest in rural areas at 6.68%, while urban inflation stood at 5.62%. Among states, Chhattisgarh recorded the highest inflation rate at 8.84%, followed by Bihar at 7.83%, while Delhi experienced the lowest at 4.01%.
The RBI’s inflation target is set at 4%, with an allowable margin of 2% on either side. However, with food inflation reaching a five-month high, the central bank may face pressure to revisit its policy stance if prices continue rising.
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