October inflation hits 6.21%, highest in over a year due to rising food costs

India’s retail inflation in October soared to 6.21 per cent, breaching the RBI’s target range for the first time in over a year, driven by persistently high food prices, according to data released by the National Statistics Office on Tuesday.
Inflation in September stood at a nine-month high of 5.49 per cent. Based on the Consumer Price Index (CPI), inflation was recorded at 4.87 per cent in October 2023.
The national capital, Delhi, recorded an inflation rate of 4.01 per cent. Andhra Pradesh saw the highest inflation at 6.17 per cent, while Jammu and Kashmir recorded the lowest at 5.5 per cent.
In October, a significant decline in inflation was observed in the pulses & products, eggs, sugar & confectionery, and spices subgroups.
The retail inflation rates for rural and urban areas were 6.68 percent and 5.62 per cent, respectively.
Upasana Bharadwaj, chief economist at Kotak Mahindra Bank, said, “The sharply higher-than-expected CPI inflation has largely been driven by a surge in vegetable prices, along with a notable increase in core inflation.”
She further noted that rising food prices are likely to keep headline inflation above 5 percent in the upcoming report, before a seasonal decline may ease inflation levels.
The data showed that inflation in the food basket rose to 10.87 per cent in October, up from 9.24 per cent in September and 6.61 per cent in the same month last year.
The central bank, which kept the key short-term lending rate unchanged earlier this month, is mandated by the government to maintain inflation at 4 per cent, with a permissible margin of 2 per cent on either side.