After a slight sluggishness in July-August, retail inflation has again reached the sky. Retail inflation was recorded at 5.49 percent in September 2024, which was 3.14 percent in August. Retail prices of vegetables increased by 36 percent. If inflation continues to rise at this rate, then RBI may refrain from cutting interest rates in December. The increased prices of potatoes, onions, tomatoes along with green vegetables pushed the retail inflation rate of September to a nine-month high. According to government data released on Monday, the retail inflation rate of September was recorded at 5.49 percent, while the inflation rate of August this year was 3.14 percent. In September, the prices of pulses along with vegetables and fruits also supported the retail inflation rate. For the last one and a half months, the price of potato and onion has been between 50-70 rupees per kilogram, while the retail price of tomato was 60-80 rupees per kilogram last month, which has currently crossed 100 rupees per kilogram.
Retail inflation rate of various commodities in September Commodity inflation rate (in percentage) Cereals 6.84 Meat-fish 2.66 Edible oil-ghee 2.47 Sugar 3.46 Fruits 7.65 Clothes and footwear 2.71 Transport and communication 2.77 Ready-made food and sweets 3.56 Will there be no reduction in interest rates?Due to the prices of potato, onion and tomato not coming down, the retail inflation rate of October can also remain above five percent like September. The result of this will be that RBI will not be in a position to cut interest rates in the coming December also. Due to inflation being below five percent for the last several months, last week RBI had indicated to cut interest rates in December.
Food inflation is not decreasing
According to the data released on October 14, the inflation rate of food items increased to 9.4 percent in September, whereas this rate was 5.66 percent in August this year. In September, the retail inflation rate of total vegetables including potatoes, onions, tomatoes etc. increased by 36 percent compared to September last year. The price of pulses increased by 10 percent and fruits by 7.65 percent. In September, the retail price of spices fell by 1.39 percent.
Higher inflation in less developed states
According to government data, the retail inflation rate in less developed states is higher than the national average. Bihar had the highest retail inflation rate of 7.5 percent while the retail inflation rate in Delhi was 3.67 percent. In September, the retail inflation rate was 6.74 percent in Uttar Pradesh, 7.36 percent in Chhattisgarh, 6.20 percent in Himachal Pradesh, 5.94 percent in Madhya Pradesh, 6.56 percent in Orissa.
