Retail inflation hits 7-month high of 3.58% in October

NEW DELHI: Retail inflation rose to 7-month high of 3.58 percent in October mainly due to surge in prices of food and fuel products.

According to the CPI data released on Monday by the Central Statistics Office (CSO), the consumer food prices index (CFPI) rose by 3.58 percent in October from 3.28 percent in September. It was 4.20 percent in October last year.

Retail inflation has been steadily rising since June, when it eased to 1.46 percent - its slowest pace since India started releasing such figures in January 2012, based on combined data for rural and urban consumers.

Separately, annual industrial output grew a lower-than-expected 3.8 percent in September.

Prices pressures are building just as the Reserve Bank of India projected last month inflation to rise in October-March to 4.2-4.6 percent, above its medium-target of 4 percent, while leaving rates unchanged.

Crude prices have rallied, sending Brent crude to its highest since June 2015, a worry given that India imports most of its energy needs.

Despite a cut in taxes, retail petrol prices have gone up by 7.6 percent and diesel by 6.6 percent in New Delhi in the last year.

Prime Minister Narendra Modi, who faces crucial state elections in his home state of Gujarat next month, is under pressure to revive economic growth, which slipped to 5.7 percent in the April-June quarter, the slowest pace in three years.

Government, facing risks of a widening fiscal deficit this year mainly due to lower growth in revenue receipts, wants the RBI to ease policy rates to support private investments and revive economic growth.

With Agency Inputs