Retail Inflation September 2023: Led by a drop in vegetable prices, the retail inflation for September eased to 5.02%. In August, the headline print was 6.83%, compared to 7.44% in July, according to data from the Ministry of Statistics and Programme Implementation.
While inflation is showing a downward trend, this CPI number of just over 5% is still higher than RBI's target of 4%.
RBI governor Shaktikanta Das during the October MPC meet made it clear that the central bank’s inflation target is 4% and not 2% to 6%. For FY24, RBI has projected the CPI inflation at 5.4% and the inflation for Q1FY25 is estimated to be 5.2%.
Even though vegetables and edible oil prices dropped, the inflation in cereals pulses and spices continued to exert price pressures due to domestic weather shocks, geopolitical turmoil and global shortages.
Meanwhile, the onset of Israel-Hamas war has now also put pressure on the crude oil prices.