Inflation jumps to 8-month high of 7.34% on rising food prices; tough task ahead for RBI on rate cut decisions

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The Consumer Food Price Index crossed the double-digit mark and was 10.68 percent in September

Retail inflation rose to an eight-month high of 7.34 percent in September on rise in the prices of food items, said a government data.

The Consumer Price Index (CPI)-based inflation was 6.69 percent in August 2020 and 3.99 percent in September 2019.

Inflation has been hovering above 4 percent, which is above the comfort level of Reserve Bank of India (RBI), since October 2019. The previous high in the CPI was witnessed at 7.59 percent in January 2020.

The high inflation is expected to make the RBI’s task to push growth by reducing the interest rate even more difficult in coming the days.

The Consumer Food Price Index (CFPI) crossed the double-digit mark and was 10.68 percent in September. It was 9.05 percent in the previous month, said the data released by the National Statistical Office (NSO).

The retail inflation was also high month-on-month in meat and fish, and pulses and products. However, it was lower in cereals and products and milk and products.

The CPI-based price rise was lower in the fuel and light segment at 2.87 percent during September over 3.10 percent in the preceding month, the data said.

The inflation in the vegetable segment was 20.73 percent in September, significantly up from 11.41 percent in the preceding month. Similarly, the rate of price rise in the fruits was high over August.

The rate of price rise in the protein-rich eggs was 15.47 percent in September as compared to 10.11 percent in August.

With inputs from agency

Image credit: File photo

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