India's retail inflation eased to 5.02% year-on-year in September 2023, according to the latest data from the National Statistical Office (NSO) under the ministry of statistics and programme implementation. This is below the Reserve Bank of India's tolerance limit of 6%. In August, the retail inflation stood at 6.83%.

During the month under review, the retail inflation in rural areas stood at 5.33% as against 7.02% in August this year. In September, the retail inflation in urban areas stood at 4.56% as against 6.59% in the previous month.

Meanwhile, the CPI index during the month under review stood at 184.1 as against 186.2 in August this year. The CPI index in rural areas stood at 185.8, whereas in urban areas it was 182.2. In contrast to this, in August, the rural and urban CPI index stood at 187.6 and 184.5, respectively.

The consumer food price index (CFPI) fell from 9.94% in August to 6.56% in September. Of this, the CFPI for rural and urban areas stood at 6.65% and 6.35%, respectively during the month under review. In contrast to this, in August, the CFPI in rural and urban areas stood at 9.67% and 10.42%, respectively.

The CPI inflation rate for fruits and vegetables stood at 7.30% and 3.39%, respectively in September this year. For fruits, the CPI inflation rate in rural and urban areas stood at 5.73% and 9.07%, respectively. For vegetables, the CPI inflation rate in rural and urban areas stood at 4.18% and 2.13% respectively. The CPI inflation rate for milk products stood at 6.89%, whereas for pulses and products, the CPI inflation rate stood at 16.38%.

Amongst states, the inflation rate in Haryana was the highest at 6.49%, followed by Karnataka at 6%. Delhi and Maharashtra had inflation rates of 2.24% and 4.94%, respectively.

Last week, in its fourth bi-monthly monetary policy, kept the key repo rate “unchanged” at 6.50%. The MPC also maintained the inflation outlook for FY24 at 5.4%. According to RBI governor Shaktikanta Das, the overall inflation outlook is clouded by uncertainty due to a fall in kharif sowing, volatile global food and energy prices, and lower reservoir levels. "I would like to emphatically reiterate that our inflation target is 4% and not 2 to 6%. Our aim is to align inflation to the target on a durable basis while supporting growth. Our commitment to ensuring financial stability reinforces our emphasis on price stability and anchoring of inflation expectations. This would keep inflation risk premium low and improve our competitiveness, productivity and growth potential," he said.

“Global headline inflation could remain high for a longer period than estimated," he added.

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