India’s retail inflation surged to a 14-month high of 6.21% in October 2024, up from 5.49% in September, driven primarily by rising food prices during the festive season. This increase marks the first time since August 2023 that inflation has exceeded the Reserve Bank of India’s (RBI) tolerance threshold of 6%.
Food inflation saw a significant rise, reaching 10.87%, compared to 9.24% in September and 6.61% in October 2023. The sharp increase in prices was particularly notable for essential items such as vegetables, with wholesale onion prices rising from ₹40-60 per kilogram to ₹70-80 per kilogram.
The inflation figures also indicated a disparity between rural and urban areas, with rural inflation climbing to 6.68% and urban inflation at 5.62%. Economists are projecting that overall inflation may ease in November due to a favorable base effect and a recent decline in vegetable prices, but the current surge has raised concerns about potential implications for monetary policy as the RBI prepares for its next meeting in December.
