India’s retail inflation rose to a 14-month high of 6.2 percent in October compared with 5.5 percent in the previous month, as food inflation galloped on the back of rising vegetable prices.
The October reading, was above the Moneycontrolpoll median of 5.9 percent from 15 forecasts, and breached RBI’s upper band target of 6 percent for the first time in over a year, raising fears that the Reserve Bank of India may hold rates for the eleventh consecutive time at its meeting in December.
Food inflation rose by double digits for the first time in fifteen months to 10.9 percent from 9.2 percent in the previous month, according to data released by the government on November 12.
Rising vegetable prices contributed to food inflation, as vegetable inflation rose to a near five year high of 42.4 percent.
Tomato inflation was up 161.3 percent in October compared with 42.9 percent in the previous month, while garlic (82.5 percent), potato (64.9 percent) and onion inflation (51.8 percent) all remained in high double digits.
The government's imposition of customs duty on oil also contributed to higher prices, with refined oil prices rising 10.4 percent in October compared with a 0.3 percent deflation in September.
Coconut oil prices were up 34.5 percent compared with 23.9 percent.
The reprieve for the government was further easing in pulses inflation, which declined to 17-month low of 7.4 percent and rice inflation, which fell to a 26-month low.
Economists contend that inflation is likely to remain elevated in November as well, pushing the full year estimate higher than RBI's forecast of 4.5 percent.