India's Consumer Price Index Inflation cooled down to 4.87 per cent in the month of October, data released by Ministry of Statistics and Programme Implementation showed. In September, CPI inflation was recorded at 5 per cent. The consumer food price index (CFPI) remained stable at 6.61 per cent, a marginal decline from 6.62 per cent recorded in September.
In rural areas, CPI inflation was recorded at 5.12 per cent while urban areas saw 4.62 per cent retail inflation last month. The decline in inflation comes as a boost to RBI's efforts to bring down inflation to its target of 4 per cent. Notably, the headline inflation has remained above the target for more than four years due to several factors, which include supply chain disruptions.
Earlier this year, CPI inflation had increased to 7.44 per cent in July due to sudden surge in vegetable prices. As the markets normalised, CPI inflation cooled down to 5 per cent in September. The sudden surge in inflation had forced the central bank to revise its forecast for CPI inflation to 5.4 per cent from the earlier 5.1 per cent for FY24.
RBI has projected 5.6 per cent inflation for the October-December quarter. The central bank has kept its repo rate unchanged since April at 6.5 per cent. Analysts expect RBI to keep its range higher for longer, with rate cuts expected in the first quarter of next financial year.
The next monetary policy committee meet is scheduled to be held in early December. With onion prices and pulses continuing to put pressure on headline inflation, analysts expect retail inflation to inch up in the next two prints.