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4h ago

India Inflation Hits 8-Year Lows as CPI Falls to 1.54% and WPI Eases to 0.13%

Food-price deflation is driving the slide, prompting an RBI pause at 5.5% with only limited scope to cut.

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Overview

  • Official data show September CPI at 1.54%, the lowest since June 2017 and below the RBI’s 2%–6% band, with food inflation at –2.28% and vegetable prices down 21.38% year on year.
  • Wholesale inflation cooled to 0.13% in September, with food articles in deflation at 5.22% and wholesale vegetable prices plunging 24.41%, while fuel and power registered a 2.58% decline.
  • Core inflation firmed to around 4.5%, lifted by housing and precious metal prices, underscoring a divergence from the headline disinflation led by volatile food items.
  • The RBI kept the policy rate at 5.5% in its October review and lowered its FY26 inflation forecast to 2.6%, while economists say a potential 25 bps cut in December would depend on growth signals.
  • Analysts expect a further CPI drop in October, citing base effects and GST rate cuts, even as regional variation persists with rural inflation at 1.07%, urban at 2.04%, and Kerala the highest among states at 9.05%.