Retail inflation jumps to 9-month high of 5.49% in September with soaring vegetable prices

After remaining within the Reserve Bank of India's median target of 4 per cent during July and August, India’s Consumer Price Index (CPI)-based -- retail inflation jumped to a nine-month high of 5.49 per cent in September 2024 from 3.65 per cent in August 2024, with soaring vegetable prices. The CPI was 5.02 per cent in September 2023. The previous high inflation rate was witnessed in December 2023 at 5.69 per cent. The inflation rate in the food basket rose to 9.24 per cent in September compared to 5.66 per cent in August and 6.62 per cent in the year-ago month. The National Statistical Office (NSO) said it is likely that the increase in inflation rate for the month of September 2024 is due to high base effect and weather conditions. The Reserve Bank of India (RBI), which kept the key short-term lending rate unchanged earlier this month, has been asked by the government to ensure the CPI inflation rate remains at 4 per cent with a margin of 2 per cent on either side.

The NSO, Ministry of Statistics and Programme Implementation (MoSPI) in its data has showed that Rural CPI (General) in September 2024 stood at 5.87 per cent over 4.16 per cent in August 2024. The Urban CPI (General) stood at 5.05 per cent in September as against 3.14 per cent in August. The index value for Rural, Urban and Combined CPI (General) stood at 196.7, 191.4 and 194.2 respectively, in September 2024. The price data is collected from selected 1114 urban Markets and 1181 villages covering all States/UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster. During the month of September 2024, NSO collected prices from 99.7% villages and 98.6% urban markets while the market-wise prices reported therein were 88.2% for rural and 92.2% for urban. 

The surge in food and beverages inflation in September 2024 vis-a-vis August 2024 was largely led by vegetable inflation, which surged to a 14-month high of 35.99 per cent from 10.71 per cent in the previous month. Food and beverages, which accounts for 45.86 per cent of the total weight of Consumer Price Index (Combined), registered an inflation rate of 8.36 per cent in September, up from 5.30 per cent in August. Inflation rate for fruits rose to 7.65 per cent and from 6.45 per cent. For milk and milk products, the inflation rate was 3.03 per cent as against 2.98 per cent in August. The inflation rate for meat and fish, egg segments came down at 2.66 per cent and 6.31 per cent from 4.30 per cent and 7.14 per cent, respectively. The Fuel and light inflation rate for September stood at (-) 1.39 per cent as against (-) 5.31 per cent in August. For clothing & footwear and housing sectors, the inflation rates were 2.71 per cent and 2.78 per cent, respectively.