Retail inflation at 7-month high in October

Consumer price inflation, which affects the common man more closely, has been rising since June this year. Last month, it was 3.28%. But a fresh increase in vegetable prices, especially onions and potato, accelerated the pace in October. PTI

The country's retail inflation for October came in at a seven-month high of 3.58% on the back of high food, vegetable and fuel prices.

Consumer price inflation, which affects the common man more closely, has been rising since June this year. Last month, it was 3.28%. But a fresh increase in vegetable prices, especially onions and potato, accelerated the pace in October.

The rate of increase in vegetable prices was recorded at 7.47% in October compared with 3.92% last month, government data showed. Unseasonal rains in Maharashtra and Karnataka jacked up onion prices as the output in the kharif season went down. Onion and potato together account for 27% of total weight of vegetables in the CPI index.

Retail food prices in October also increased 1.9% compared with 1.25% last month. Protein-rich items such as milk and egg also witnessed price rise in October but fruits were marginally cheaper. Inflation in fuel was also higher in October. Even after a cut in excise duty on petrol and diesel in October, the retail prices of both fuels have gone up more than 15% since last year.

CPI housing index was also higher by 6.68% after a 7th Pay Commission hike in house rent allowance. This segment is expected to go up further when states start handing out the allowance following the Centre.

The overall retail inflation, however, is expected to soften in the coming months after the government announced a GST rate reduction in over 200 items last week.

The new rates will, however, be effective only from November 15, implying the partial impact of that will be visible in December inflation print.