Consumer inflation falls to 4.31%, makes room for more rate cuts
Photo Credit: Shah Junaid/VCCircle

Retail inflation in September dropped to 13-month low of 4.31 per cent mainly on account of easing vegetables prices.

Retail inflation, measured by Consumer Price Index (CPI), was 5.05 per cent in August. It was 4.41 per cent in September 2015.

The previous low of 3.74 per cent was recorded in August last year.

The Reserve Bank takes into account retail inflation while deciding on its key lending rate. It has been mandated to contain inflation at 4 per cent, within 2 per cent range on either side.

As per data released by the government, inflation in vegetable segment was in the negative, contracting 7.21 per cent. The vegetable inflation was 1.02 per cent in August.

Similarly, the pulses prices too were subdued last month as also of egg and milk (and its products). Inflation in case of meat and fish basket was 5.83 per cent in September, marginally down over the previous month.

However, fruits became dearer in last month over the previous months.

Overall, the Consumer Food Price Index was down at 3.88 per cent compared with 5.91 per cent in August.

The CPI based inflation in fuel and light segment was up at 3.07 per cent in September in comparison to 2.49 in August.

The data released by the Ministry of Statistics and Programme Implementation further said retail inflation in urban areas was 3.64 per cent in September as against 4.22 per cent in the previous month.

Rural retail inflation was 4.96 per cent in comparison to 5.87 per cent in August.

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