Retail Inflation September 2024: Retail inflation rose to a nine-month high of 5.49 percent in September due to a sharp rise in vegetable prices. This information was given in the official data released on Monday. Inflation based on the Consumer Price Index was 3.65 percent in the previous month of August while it was 5.02 percent in September last year. Earlier, it had reached a high of 5.69 percent in December 2023.

According to the data of the National Statistical Office (NSO), inflation in food items jumped to 9.24 percent in September as compared to 5.66 percent in August and 6.62 percent in the same month a year ago. The NSO said, "We estimate that the increase in inflation in September is due to high comparative base effect and weather conditions."

According to data released earlier in the day, wholesale inflation rose to 1.84 percent in September. Wholesale inflation rose due to the rising prices of food items, especially vegetables.

In August, the Wholesale Price Index (WPI) based inflation was 1.31 percent. In September last year, it had fallen by 0.07 percent. The Reserve Bank of India has been given the responsibility of keeping the retail inflation at four percent with a variation of two percent. The central bank did not make any change in the key policy rate repo in the monetary policy review presented last week to bring inflation in line with the target.

How much was the inflation of vegetables and pulses

On an annual basis, the inflation of vegetables was around 36 percent in September. In the case of pulses and its products, it was 9.81 percent. During this period, fruits also became expensive. According to the data, however, the inflation of spices decreased on an annual basis in September.

ICRA Ltd. Chief Economist Aditi Nair said, "The main reason for the increase in food inflation in September as compared to August is the rise in vegetable prices. It reached a 14-month high of 36 percent, which was 10.7 percent last month." She said, "If this is removed, the inflation of food items would have been at a 59-month low of 3.9 percent in September this year, which was 4.3 percent in August."

Decrease in production of tomato and gram dal

While presenting the bi-monthly monetary policy review on October 9, RBI Governor Shaktikanta Das had said that due to an unfavorable comparative base and rise in prices of food items, inflation may increase significantly in the month of September. The reason for the rise in food inflation is, among other things, the reduction in the production of onion, tomato, and gram dal in 2023-24.

Food inflation will soften in the coming days.

Sujan Hazra, Chief Economist and Executive Director, Anand Rathi Shares and Stock Brokers, said that the increase in retail inflation in the month of September was more than expected. The main reason for this increase is the rise in vegetable prices. He said, "With a normal monsoon this year, we expect that the supply in the market will be better in the coming days and the inflation of food items will soften. However, the main (headline) inflation may remain at 4.5 to 5 percent in the next one to two months, which is more than the RBI's current target of four percent. Due to this, the central bank can keep the repo rate unchanged this year... "

Inflation in urban areas is 5.87 percent.

According to NSO data, the inflation rate at the national level is 5.49 percent while in rural and urban areas it is 5.87 percent and 5.05 percent respectively. Inflation was highest in Bihar at 7.5 percent while it was lowest in Delhi at 3.67 percent. Inflation of food items was high in urban areas.