People living in Delhi enjoyed the lowest year-on-year inflation rate in the country at 2.99 per cent in October while those in Telangana suffered the highest at 8.82 per cent, as per the government inflation figures.
While Andhra Pradesh comes second in the high inflation pecking order at 7.93 per cent, the third spot is taken by Haryana with an inflation rate of 7.79 per cent.
The people of Himachal Pradesh enjoyed the second lowest inflation rate in the country last month at 4.42 per cent and Punjab comes next with 4.52 per cent.
According to the Central government, the retail inflation or consumer price index (CPI) inflation came down to 6.77 per cent in October 2022 from 7.41 per cent in September 2022.
Reacting to the inflation numbers, CARE Ratings’ Chief Economist Rajani Sinha told IANS: “Retail inflation eased to a 3-month low of 6.8 per cent broadly in line with our expectations. The moderation is primarily led by a strong base. There was an acceleration in sequential price momentum with food being the major contributor.”
She said that CPI core was elevated and unchanged at 6.2 per cent, reflective of continued demand-driven pressures.
“Going forward, with the base effect kicking in, we can expect the inflation numbers to moderate gradually. The easing of global commodity prices and domestic WPI inflation is also supportive of moderation in CPI inflation. However, producers may not fully pass on the benefits of easing commodity prices to the final consumers in the near-term,” Sinha said.
According to her, the Reserve Bank of India (RBI) may be less hawkish in its upcoming December policy meet and go for a 35-bps rate hike.
Nonetheless, there is a need to closely monitor the impact of volatility in food inflation and impact of exchange rate on imported inflation.
“Factoring the upside risk from food inflation, we have revised upwards our inflation forecast for FY23 to 6.8 per cent (earlier 6.5 per cent). We expect inflation to average 6.6 per cent in the third quarter and 6.2 per cent in the fourth quarter of this fiscal. CPI inflation could fall below 6 per cent only by the end of this fiscal,” Sinha added.