Retail inflation hits 9-month high of 5.49% in September

New Delhi: Rising vegetable prices drove retail inflation to a nine-month peak of 5.49 per cent in September, according to government data released on Monday.

In August, the consumer price index (CPI)-based inflation was at 3.65 per cent, while it stood at 5.02 per cent in September 2023. The last time inflation reached a higher level was in December 2023, when it hit 5.69 per cent.

Data from the National Statistics Office (NSO) shows that food basket inflation surged to 9.24 per cent in September, up from 5.66 per cent in August and 6.62 per cent in September of the previous year.

The NSO noted that the inflation increase in September 2024 was likely influenced by a high base effect and weather conditions.

According to another data released on Monday, the wholesale price inflation (WPI) rose to 1.84 per cent in September as food items, especially vegetables, turned costlier.

The wholesale price index (WPI)-based inflation was 1.31 per cent in August. It was (-) 0.07 per cent in September last year.

The Reserve Bank of India (RBI), which kept the key short-term lending rate unchanged earlier this month, has been asked by the government to ensure the CPI inflation rate remains at 4 per cent with a margin of 2 per cent on either side.

The annual inflation rate in the vegetable basket in September was nearly 36 per cent and in ‘pulses and products’ it was 9.81 per cent. Fruits, too, were dearer.

However, inflation in spices was in the negative in September, compared to the year-ago month.

While unveiling the bi-monthly monetary policy on October 9, RBI Governor Shaktikanta Das had stressed that the central bank will have to closely monitor the price situation and keep the “inflation horse” under tight leash. Das had also said the CPI print for September would see a big jump due to unfavourable base effects and pick-up in food price momentum, caused by the lingering effects of a shortfall in the production of onion, potato and chana dal (gram) in 2023-24, among other factors.

The NSO data further said while the national inflation rate is 5.49 per cent, the corresponding rates for rural and urban work out at 5.87 per cent and 5.05 per cent, respectively.

The highest inflation rate was in Bihar (7.5 per cent) while the lowest was in Delhi (3.67 per cent). The inflation food items were higher in urban areas.

The year-on-year housing inflation rate in September was 2.78 per cent. with agency inputs