The Inflation

Consumer inflation at 14-month high of 6.2%

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India’s retail inflation based on the Consumer Price Index (CPI) rose to 6.21 per cent in October 2024, a 14-month high, according to the latest official data released on Tuesday. However, industrial production grew by 3.1 per cent in September 2024.

India’s retail inflation was at a nine-month high of 5.49 per cent in the previous month of September 2024. It was at 4.87 per cent in October 2023.

In October 2024, inflation went above the Reserve Bank of India’s (RBI) upper limit of 6 percent. Earlier this month, the RBI chose not to change the main interest rate. The government has set a goal for the RBI to keep inflation around 4 percent, allowing it to go up or down by 2 percent, meaning inflation should stay between 2 and 6 percent.

India’s food prices have gone up a lot recently. In October 2024, food inflation reached 10.87 percent. This is higher than the 9.24 percent rise in September 2024 and much higher than the 6.61 percent increase in October 2023.

Inflation

Inflation rate is the rate increase over a time. It’s usually measured annually and is a broad indicator of how fast prices are rising. Inflation is calculated by comparing the price of a basket of goods and services in a given month to the same basket in the same month the previous year. 

Inflation is a key indicator of a country’s economic health. A low and stable inflation rate is generally considered a sign of a healthy economy. When inflation is too high or rising too quickly, it can lead to uncertainty and a loss of purchasing power. 

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