Good news, RBI! Retail Inflation stands at 3.31% in October 2018, food inflation negative

The Central Statistics Offices today presented the Consumer Price Index (CPI) inflation or retail inflation data for the month of October, 2018. It was logged at 3.31%, surpassing even what analysts had predicted. CPI Inflation for latest month was lower from 3.70% data in September 2018 and also 3.58% witnessed in corresponding period of previous year. 

Surprisingly, Consumer Food Price Index (CFPI) was in negative at -0.86% this month compared to 0.51% in September 2018 and 1.90% in October 2017. 

The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation has revised the Base Year of the Consumer Price Index (CPI) from 2010=100 to 2012=100 with effect from the release of indices for the month of January 2015.

source: tradingeconomics.com

Under inflation, the Food and beverages inflation was at -0.14% this month, while Pan, tobacco and intoxicants stood at 6.13%.

Moreover, during October, clothing and footwear inflation was at 3.55%, housing inflation at 6.55%, fuel & light at 8.55%. 

Also miscellaneous category which includes items like household goods and services, health, transport and communication, recreation and amusement,  Education, personal care and effects etc witnessed inflation rate of 6.73%. 

On October CPI data, Shilan Shah, Senior India Economist at Capital Economics had made this prediction, “Consumer price inflation is likely to have eased in October following a renewed drop in food inflation. This may prove enough to keep the RBI on the side-lines in its meeting next month. But with core inflation likely to remain elevated for a while yet, we think the tightening cycle still has a little bit further to run.”

Shah had said, “Our forecast is that CPI inflation will have dropped back in October, to 3.6% y/y. The data ... will be the last that are available to the RBI before its next policy meeting.”