India’s Retail Inflation Falls To Over 8-Year Lows In September

India’s annual retail inflation fell to 1.54% in September from 2.07 % in August, and marked the lowest year-on-year (YoY) inflation since June 2017. It was boosted by a drop in food inflation.

Food inflation dropped to -2.28% in September, the lowest since December 2018. It was -0.64 in the previous month. It remained negative for the fourth consecutive month.

The CPI inflation has dipped below the lowest range of the Reserve Bank of India’s mandate. 

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Stocktwits News Desk

The fall in headline and food inflation in September is primarily due to a favorable base effect and a drop in the prices of vegetables, oils and fats, fruits, pulses and related products, cereals and products, eggs, and fuel and light, according to a press release by the Indian government on October 13.

Vegetable prices reduced, with inflation at -21.38% compared to -15.92% last month. Pulse inflation decreased slightly to -15.32, against -14.53% in August. 

Inflation was lower across both rural and urban areas. Rural inflation fell to 1.07% in September from 1.69% last month, while urban inflation came in at 2.04%, down from 2.47% last month. Fuel and light inflation eased to 1.98% from 2.32% in August.

CPI Well Below RBI Estimates

Earlier this month, the Reserve Bank of India (RBI) maintained the repo rate at 5.50%, raised FY26 GDP growth estimates to 6.8% from 6.5%, and revised the FY26 CPI inflation forecast lower to 2.6% from 3.1%. The central bank cited the impact of the GST reform and a more-than-expected decline in food prices as the primary reasons for the revision.

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