Core inflation increased to 0.80% in October from 0.57% in September.
But inflationary pressure is prevailing. The prevailing socio-political conditions and global increase in commodity prices are adding to the pressure. Food inflation rose to 8.6 percent in October from 7.01 percent in September.
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Inflation of vegetables is at the rate of 7.7%. At the same time, fuel inflation stood at 9.93 percent in October, as against 8.6 percent in September. RBI Governor Shaktikanta Das had earlier expressed hope that October inflation would be below 7 percent. He also opined that the Reserve Bank is currently dealing with inflation very effectively.
Rating agency Moody’s has recently downgraded India’s growth forecast. This was attributed to high inflation and increased interest rates.
But experts believe that apart from one factor, inflation, there are many factors that give India better growth prospects.
Inflation has become a headache for central banks around the world. Uncertainty following the Russia-Ukraine war has affected supply chains globally. The war dealt a heavy blow to the global economy, which was trying to recover from the Covid-19 pandemic.
This was also reflected in India. Consumer Price Index-based inflation has remained at 2 to 6 percent for three quarters. This hampers the central bank’s efforts to contain inflation.
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According to RBI’s estimates, inflation is estimated to be 6.5% in the third quarter of FY2023. It will be 5.8 percent in the fourth quarter of this financial year.
India’s annual domestic wholesale price inflation was 8.39% in October, the Ministry of Commerce has also released data.
Even so, the rupee is struggling to hold its own against the dollar. The global crisis has not been resolved. In this situation, it is believed that there will be further increase in the repo rate from the side of RBI.
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