Inflation in vegetables crashed from 26.1% in August to just 3.4% in September but inflation in cereals remained sticky at 11% and the pace of price rise in pulses accelerated from 13% in August to 16.4% last month. File
| Photo Credit: Sushil Kumar Verma

India’s retail inflation eased from 6.83% in August to 5.02% in September, breaking a two-month streak over the tolerance threshold of the Reserve Bank of India (RBI), with food price rise easing to 6.6% from almost 10% in the previous month.

Rural inflation stood at 5.33% in September, compared to 7% in August, while price rise faced by urban consumers moderated more sharply to 4.65% last month from 6.6% in August.

Inflation in vegetables crashed from 26.1% in August to just 3.4% in September but inflation in cereals remained sticky at 11% and the pace of price rise in pulses accelerated from 13% in August to 16.4% last month.

Base effects from September 2022, when consumer prices rose 7.4%, also helped ease the inflation rate which is lower than economists’ expectations but is almost in line with the central bank’s Monetary Policy Committee’s (MPC) projections.

The MPC raised its average inflation projection for the July to September quarter from 6.2% to 6.4% last week, and the numbers released by the National Statistical Office on October 12 put the average pace at 6.43%.

In the current quarter, the MPC expects inflation to average 5.6% with the full year 2023-24 averaging 5.4%. On a month-on-month basis, food prices fell 2.2% in September while overall consumer price levels dropped 1.1%.

Milk inflation eased slightly from 7.7% in August to 6.9% in September but some other key protein sources such as eggs (6.4%), meat and fish (4.11%) clocked higher inflation last month.

Price rice in spices remained almost unchanged at 23.1%, while fruits inflation jumped from 4% in August to 7.3% in September and sugar inflation accelerated to 4.5%.