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2h ago

India’s Inflation Falls to Record 0.25% in October as Food Prices Sink and GST Cuts Take Hold

The reading heightens prospects of an RBI rate cut in December, contingent on incoming growth and trade data.

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October is the ninth consecutive month in which headline inflation has stayed below the 4% target of RBI. (Bloomberg)
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Overview

  • Official data show CPI at 0.25% year on year in October, down from a revised 1.44% in September and below market forecasts.
  • Food inflation plunged to −5.02%, led by vegetables (−27.6%), pulses (−16.1%) and onions (−54.3%), delivering the sharpest drag on the headline rate.
  • Core inflation edged up to about 4.4–4.5%, with surging gold and silver prices offsetting some GST-related relief in non-food categories.
  • The government attributed the drop to the full-month pass-through of late‑September GST rate cuts, a favorable base, and broad declines across key staples; rural and urban food inflation were −4.85% and −5.18%, respectively.
  • Economists said the print strengthens the case for easing at the December MPC meeting, though the decision remains a close call pending Q2 GDP, trade and industrial output readings.