In September, inflation spiked significantly following the rise in food prices. Wholesale price inflation (WPI) shot up to 1.84%, compared to 1.31% in August, while retail inflation spiked to 5.49% in September, which was 3.65% in August. So, what made inflation spike again in September? Let’s find out.
Reasons behind the spike in inflation in September 2024
In July inflation started going down, it was 3.6% in July, which merely rose to 3.65% in August, but in September it went up to 5.49%, and the WPI inflation even went up to 1.84% and all this is due to rise in food price spike.
The vegetable prices soared the most to 36% which is massive and took the overall inflation upward. Here is a full list of inflation on different items to have a clear understanding –
| Items | Inflation |
| Food Inflation | 9.24% |
| Vegetables | 36% |
| Personal Care Products | 9% |
| Fruits | 7.7% |
| Cereals | 6.8% |
| Eggs | 6.3% |
| Education | 3.8% |
| Milk & milk products | 3.03% |
| Clothing | 2.7% |
| Oil & fats | 2.5% |
| Fuel | -1.4% |
As mentioned in the table above, food inflation in India has taken all the prices mainly upward. Even though fuel and power deflation happened that is fuel prices have come down by 1.4% extreme weather conditions, and geopolitical turmoil are raising the prices of food items.
Amongst the vegetables, the costliest vegetables for September were potatoes and onions for which inflation spiked 78.13% and 78.82% respectively.
RBI’s take on the spike in inflation
RBI in its last MPC meeting, kept the repo rate at 6.5% for the tenth time in a row. Though the market was expecting a rate cut following the Fed rate cut since food price inflation is too high in India, RBI is yet to consider any rate cut. When the inflation went down in July to 3.6%, the chances of a rate cut increased by the end of this year, however, now given the inflation spike again, a rate cut seems distant now.
Source: TheIndianExpress
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