Retail inflation eases to 8-year low of 1.54%, Pg1

Key Highlights:

• Retail inflation hit a more than eight-year low of 1.54% in September 2025, according to official data.
• The Consumer Price Index (CPI), released by the Ministry of Statistics and Programme Implementation, was last lower in June 2017 at 1.46%.
• Food and beverages saw a contraction of 1.4% in September, compared to 0.05% growth in August.
• Inflation in the oil and fats category stood at 18.3% in September, marking the 11th consecutive month of double-digit inflation in this sub-group.

Detailed Insights:

• The drop in retail inflation in September fell below the Reserve Bank of India’s (RBI) lower comfort bound of 2%.
• A favorable base effect and good monsoon are expected to keep food inflation benign, but risks remain from late monsoon withdrawal and heavy rain that could damage crops.
• Persistently high double-digit inflation in edible oils requires close monitoring due to weak sowing trends, import dependence, and elevated global prices.
• Fuel and light inflation eased to 1.98% in September, continuing a downward trend since April, providing relief to households and improving purchasing power.
• The Monetary Policy Committee (MPC) of the RBI has revised its inflation forecast downwards for the fourth time, raising hopes for a potential rate cut in December.

Key Concepts Involved:

• Retail Inflation: The change in the price of a basket of goods and services that are typically purchased by households.
• Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services.
• Monetary Policy Committee (MPC): A committee of the Reserve Bank of India that sets the benchmark interest rate.