Driven by increased vegetable prices and a declining year-ago base, India’s retail inflation increased to 5.49% in September, breaking the Reserve Bank of India’s (RBI) 4% medium-term target for the first time since July. This rise comes after a five-year low of 3.65% was reached in August.
Inflation rate for Indian staples
The inflation rate for vegetables climbed 35.99 percent in August, up from 10.71 percent the previous month, while pulses and products inflation fell to 9.81 percent, down from 13.6% in August.
Inflation is returning to stability
The Reserve Bank kept its retail inflation forecast for the fiscal year 2024–2025 at 4.5% during the Monetary Policy Committee (MPC) meeting in October. Governor Shaktikanta Das emphasized that the central bank will need to closely monitor the price situation and keep the “inflation horse” under strict leash lest it run away once more.
