Retail inflation rises to seven-month high of 3.58% in October

Mae Love
November 13, 2017

India's retail inflation quickened to 3.58% in October, the fastest pace in seven months, spurred by rising food and fuel prices, virtually ruling out the possibility of an interest rate cut by the Reserve Bank of India (RBI) in its 6 December monetary policy review.

According to the data furnished by the Ministry of Statistics & Programme Implementation, October's consumer price index (CPI) inflation rose to 3.58 per cent from 3.28 per cent reported for September.

RBI holds a policy review on December 6.

Prime Minister Narendra Modi, who faces crucial state elections in his home state of Gujarat next month, is under pressure to revive economic growth, which slipped to 5.7 percent in the April-June quarter, the slowest pace in three years.

Compared to the previous month, the CPI rose 0.67 percent in October and food prices were 0.87 percent higher.

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Housing inflation grew marginally at 6.68 percent in October from 6.1 percent in September.

Crude oil price of the Indian basket stood at $62.66 per barrel on Monday.

Inflation in pulses continued to decline and settled at (-) 23.13%.

Aditi Nayar Principal Economist at ICRA said "The staggered impact on the housing index of the CPI, of the revision in HRA of central government employees, is likely to push up housing inflation further over the coming year". Moreover, the pass-through of the goods and services tax (GST) to final prices of various goods and services may not be complete.

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