Retail inflation at 14-month low of 4.2% in October on easing food prices

New Delhi: Easing food and fuel prices helped pull down retail inflation to 14-month low of 4.20 percent in October this year, strengthening the case for RBI rate cut next month.

The previous low of 3.74 percent was recorded in August last year.

The Consumer Price Index (CPI) based inflation was 4.39 percent in September this year, an upward revision from previous official record of 4.31 percent.

In October last year, retail inflation was at 5 percent.

Inflation in vegetables category was in the negative zone at (-)5.74 percent in October this year, as against (-)7.21 percent in September.

The rate of price rise in fruits slowed to 4.42 percent (against 6.07 percent), showed the data released by the Ministry of Statistics and Programme Implementation.

Pulses inflation came in as a huge respite to consumers as it grew at 4.11 percent, as against 14.33 percent.

However, protein rich items were costlier with inflation print at 6.16 percent for meat; 9.42 percent for eggs and 4.42 percent for milk, as demand of these items normally goes up during winters.

Sugar was less costly with an inflation print of 23.62 percent as against 25.77. However, cereals turned costly at 4.41 percent.

Overall, the Consumer Food Price Index was down at 3.32 percent compared with 3.88 percent in September.

The CPI based inflation in fuel and light segment was at 2.81 percent in October as against 3.07 percent a month ago.

Rural retail inflation was 4.78 percent in comparison to 5.04 percent in September; for urban sector it stood at 3.54 percent against 3.64 percent.

The Reserve Bank will present its 5th bi-monthly policy statement on December 7. It takes into account CPI data as a key input to decide on its monetary policy review.

RBI has targeted to contain inflation at 4 percent by March 2017, with 2 percent risk on either side.