In September, New Delhi saw a notable slowdown in retail inflation, measured by the Consumer Price Index, reaching a three-month low of 5.02% compared to the previous year. This decline was primarily driven by a decrease in vegetable prices, as reported by the Ministry of Statistics and Programme Implementation on Thursday.
For the first time in three months, consumer prices fell below the Reserve Bank of India’s acceptable threshold of 6%, owing to improved supplies resulting from the arrival of fresh summer-sown harvests in the markets. In August, the retail inflation rate was recorded at 6.83%.
The inflation rate for food and beverages increased by 6.3% in September, marking the slowest pace in a quarter, compared to a rise of 9.19% in August. However, cereal prices have remained in the double digits for a consecutive 12-month period, despite various measures taken by the Union government to curb prices.
In September, grain prices saw a 10.95% increase, compared to an 11.9% rise in August. Egg prices also rose at a faster rate, increasing by 6.42% as opposed to 4.3% in the previous month. Inflation in pulses, a crucial category impacting household budgets alongside cereals, accelerated in September, rising at a rate of 16.4%, in contrast to a 13% rise in August.
Since June of this year, the Union government has been releasing millions of tonnes of additional cereals from state reserves into open markets, aiming to stabilize grain prices, particularly for wheat, in light of persistent high food inflation.
Overall, the slower inflation growth in September, in line with RBI predictions, is expected to support an uptick in GDP growth, according to analysts. However, given that food commodities have been the primary driver of prices, much will hinge on the output of key summer-sown crops like rice and pulses, which have just entered the harvesting phase.
In August, retail inflation surged to a 15-month high of 7.44%, surpassing the Reserve Bank of India’s acceptable threshold of 4%, driven by soaring prices in groceries and food items.
