Oct’s retail inflation may breach RBI target
A Bloomberg survey of 33 economists anticipated retail inflation to be 4.35% in October, the highest since June last year. This will be the first time since July’18 that retail inflation will cross the 4% medium term target set by the Reserve Bank of India. This follows the fact that in September, retail inflation sharply accelerated to a 14-month high of 3.99% as food inflation nearly doubled to 5.1%.
One of the reasons for this is the soaring prices of onions owing to the dampening of production after the floods in Maharashtra. To tame the situation, the government has already started importing onions from other countries.
This rise in price, however, may not prevent another possible rate cut by the RBI in December.