Retail Inflation touches 7-month high of 3.58% in October

India's consumer price index (CPI) or retail inflation came in at 3.58% in the month of October 2017 - higher from 3.28% in September 2017 but lower as against 4.20% in the similar month of the previous year. 

A Reuters poll having over 30 economists projected consumer price inflation at 3.46% in October from a year ago, up from 3.28% in September. 

This month the Consumer food price index (CFPI) stood at 1.90% compared to 1.25% of September 2017 and 3.32% of October 2016. 

source: tradingeconomics.com

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation has revised the Base Year of the Consumer Price Index (CPI) from 2010=100 to 2012=100 with effect from the release of indices for the month of January 2015. 

Data further showed that retail inflation in eggs, vegetables, pulses and spices were -0.69%, 7.47%, -23.13% and -2.15%, respectively. 

Major indicators of CPI were all positive with food & beverages at 2.26%, pan, tobacco & intoxicants at 6.91%, clothing & footwear at 4.76%, housing at 6.68, fuel & light at 6.36% and miscellanous at 3.48%.

The Reserve Bank of India continued to fear that rising consumer prices will threaten the central bank's inflation target of 4% which led the monetary policy committee (MPC) vote for status quo in the October 2017 policy.

RBI said that inflation is expected to rise from its current level and range between 4.2-4.6% in the second half of this year, including the house rent allowance by the Centre.

Aditi Nayar Principal Economist at ICRA said “The staggered impact on the housing index of the CPI, of the revision in HRA of central government employees, is likely to push up housing inflation further over the coming year. Moreover, the pass-through of the goods and services tax (GST) to final prices of various goods and services may not be complete. Overall, we expect the CPI inflation to cross 4.0% in the ongoing quarter and exceed 4.5% in March 2018.”