NEW DELHI: Retail inflation, as measured by the Consumer Price Index (CPI), reached a nine-month high of 5.49% in September on account of rising food prices, data released by the Ministry of Statistics & Programme Implementation on Monday showed. In August, CPI inflation was 3.65%, slightly up from 3.6% in the previous month. The highest inflation rate prior to this was recorded in December 2023, at 5.69%.
According to the government, high base effect and weather conditions might have led to increase in inflation in September. The Consumer Food Price Index (CFPI), which measures food inflation, was reported at 9.24% for September. The inflation rates for rural and urban areas were 9.08% and 9.56%, respectively.
Meanwhile, the year-on-year housing inflation rate for September was 2.78%, up from 2.66% in August. The All India Electricity index for September was recorded at 162.5, with an inflation rate of 5.45%. Additionally, significant declines in inflation were noted for pulses and products, spices, meat and fish, as well as the sugar and confectionery subgroups during September.
Manoranjan Sharma, chief economist, Infomerics Ratings, said: “The inflationary surge is attributable to the base effect, 9.24% food inflation in September up from 5.66% in August, and the spike in inflation rate for vegetables from 10.71% in July to 35.99% in August. In hindsight, it is clear RBI was right in holding the rates steady in its October 9, 2024 Policy. Constant caution, vigil, and monitoring are needed.”
In addition, India’s wholesale price index-based inflation rose slightly to 1.84% in September, up from 1.31% in August, mainly due to a sharp increase in food prices. Food inflation surged to 11.53% for the month compared to just 3.11% in August, according to the commerce ministry’s data.