Retail inflation up from 4.41% in September to 5% in October
India’s annual consumer price inflation edged up to 5% in October, up for the third straight month, compared with 4.41% a month ago, government data showed on Thursday.business Updated: Nov 12, 2015 19:49 IST
India’s retail inflation rose for the third straight month, inching up to 5% in October from 4.41% in September on costlier pulses and other food items and dimming hopes for another round of interest rate cut by the Reserve Bank of India (RBI).
Consumer food price inflation, a gauge to measure to annual changes in food prices, grew 5.25% in October from 3.88% in the previous month, largely driven by high lentil prices that have hit families hard.
Retail prices of pulses -- a source of protein for households -- jumped 42.20% in October compared to a 29.8% rise in September.
Prices of pulses are now at a five-year high in some parts of the country.
India’s overall retail inflation was 4.62% in October last year, while consumer food price inflation stood at 3.88% in the same month last year.
A series of storms in this spring and a back-to-back drought has hit the output of pulses. Since India has to rely on imports to meet its entire domestic demand, any weather shock results in a big jump in prices.
The output of lentils is estimated to have fallen to 17.38 million tonnes in 2014-15 crop cycle, which usually starts in July and ends in June, from 19.25 million tonnes in the previous year due to a subdued monsoon and unseasonal rains.
Hailstorms during March and April shrunk the area sown by 10 million hectares.
RBI, which is present its monetary policy review next month, is likely to be keeping a close eye on the price situation.
The RBI, which has cut its key lending rate -- the repo rate -- by 1.25 percentage points to 6.75%, expects inflation to creep up to 5.8% by January 2016 from the current historically low levels.
A higher inflation rate will reduce its elbow room to cut rates further.
First Published: Nov 12, 2015 17:52 IST