India's Retail Inflation Hits Record Low Of 0.25% In October On GST Cuts, Dwindling Food Prices

India's retail inflation slipped to a record low in October, as food prices continued to fall and the full impact of GST rate cuts funnelled through the economy.

The Consumer Price Index (CPI)-based inflation was 0.25%, compared to 1.44% in September, according to data shared by the Ministry of Statistics on Wednesday. It is the lowest year-on-year inflation of the current CPI series. Analysts tracked by Bloomberg had estimated the inflation at 0.4%.

The government attributed the decline in headline inflation and food inflation during October to the reduction in GST rates, favourable base effect and drop in prices of oils and fats, vegetables, fruits, egg, footwear, cereals and products, etc.

Food prices fell by 5.02%, and food and beverage prices dropped 3.72%.

India's retail inflation continues to remain well below the Reserve Bank of India's target of 2-6%. The inflation slipped below the lower band of the RBI's target for the third time in this quarter.

Core inflation, which excludes the volatile food and fuel prices, rose to 4.49% in October compared to 4.37% in the preceding month. This print was the highest since September 2023.