Costlier vegetables and eggs pushed up retail inflation to a nearly six-and-a-half year high of 7.61 per cent in October, keeping it significantly above the comfort zone of the Reserve Bank.

Retail inflation stood at 7.27 per cent in September 2020, according to the Consumer Price Index (CPI) data released by the government on Thursday.

The Consumer Food Price Index rose to 11.07 per cent in October from 10.68 per cent in the previous month of September. It was 4.62 per cent in
October 2019.

The RBI, which mainly factors in retail inflation while arriving at key policy rates, has been mandated by the government to keep inflation at 4 per cent (+, - 2 per cent).

Aditi Nayar, economist at Icra, said, “While a base effect and some softening in vegetable prices may pull down inflation in the ongoing month, it is expected to recede below 6 per cent only in December.”

IIP turns positive

Industrial production entered the positive territory after a gap of six months, mainly because of higher output in the mining and power sectors, official data showed on Thursday.

The industrial output grew 0.2 per cent in September, according to the index of industrial production (IIP) data. The IIP had contracted 4.6 per cent in September 2019.
Manufacturing recorded a marginal contraction of 0.6 per cent in September. The output of the mining and power segments grew 1.4 per cent and 4.9 per cent, respectively.