September food inflation quickens sharply to 8.41%, the steepest level in 22 months; economists warn that the negative surprise could spur more rate increases from the Reserve Bank of India
September food inflation quickens sharply to 8.41%, the steepest level in 22 months; economists warn that the negative surprise could spur more rate increases from the Reserve Bank of India
India’s retail inflation accelerated to 7.41% in September from 7% in August, with food price inflation surging sharply from 7.62% in August to 8.6% in September, the National Statistical Office (NSO) said on Wednesday.
At 7.41%, September’s retail inflation level is the highest since April this year, when price rise had hit a nearly eight-year high of 7.79%. This is the ninth month in a row, when inflation has stayed above the Reserve Bank of India’s upper tolerance threshold of 6%.
The country’s rural inflation also picked up further steam from 7.15% in August to reach 7.56% in September, while urban consumers also experienced a resurgence in price rise at 7.27% from 6.72% a month ago.
Urban consumers also faced a higher surge in food inflation during September, at 8.65%, from 7.55% a month ago. For Rural India, the uptick was only slightly less pronounced, with food prices rising 8.53%, compared to 7.6% in August.
The pace of price rise for cereals increased to 11.53%, with rural India facing nearly 12% inflation in this segment in September, up sharply from 9.6% in August and nearly doubling from the 6.9% level in July.
Similarly, vegetable inflation has also virtually doubled over two months, from 10.9% in July to 18.05% in September, with urban consumers facing a sharper 20.05% rise.
Inflation in clothing and footwear, which has been over 8% since December 2021, crossed the 10% mark to reach 10.17% in September, with rural India facing a higher inflation rate of 10.41% and footwear prices surging at 12.3%.
Fuel and light inflation too stayed above the 10% mark for the fourth consecutive month at 10.4% in September, while manufactured goods again clocked more than 7% inflation.
Industrial, manufacturing output down too
Industrial output contracted 0.8% in August from the minor 2.2% growth recorded in July, with both manufacturing and mining sectors reporting lower outputs than a year ago. Overall industrial production levels were also 2.3% lower than in July 2022.
Manufacturing output saw a decline of 0.7% from August 2021 levels and was 1.48% lower than July 2022, while the mining sector dropped 3.9% from a year ago and 0.95% below July levels.
Electricity generation was the only sector to clock an uptick, with a 1.4% rise this August from a year ago and a 1.3% growth over July 2022. However, August’s electricity output index is the second lowest since April 2022.
