Shock to common people: Retail inflation in the country crosses 6% for the first time in 2 years

Common people have got a big shock on the inflation front. If we look at the government statistics, retail inflation in the country has crossed 6 percent in the month of October. This is the first time since October 2024 that the country has witnessed retail inflation above 6 percent. Which is more than the upper limit of RBI’s tolerance level. If we look at the government statistics, the inflation rate in urban areas has been seen at 6.63 percent. While in rural areas, the rate of inflation has been seen at 5.41 percent. Food inflation rate is seen around 9 percent. Let us also tell you how the retail inflation figures have been seen in the country.

Increase in retail inflation

India’s retail inflation rose to 6.09% in October from 5.5% in September, according to data released by the Ministry of Statistics and Program Implementation on Thursday. The main reason for this is the rise in food prices, which has increased the household expenditure burden. This is the 12th consecutive month of increase in consumer prices in the country. India changed the base year for retail inflation from 2012 to 2024 on February 12, 2026, modernizing the basket of commodities used to track price changes. October data shows that inflation has now moved out of the Reserve Bank of India’s (RBI) target range of 2-6%. About half of economists surveyed by Reuters expected inflation to reach or exceed the 6% level.

Increase in food inflation

Food inflation rose to 8.94% in October from 7.75% in September. This increase has further increased household expenditure pressure. At the same time, concerns over the sustainability of food inflation have deepened, particularly as uneven and incomplete monsoons have affected supplies of staple food items. Food accounts for about 40 percent of India’s Consumer Price Index (CPI), and is the largest contributor to rising retail inflation.

Onion prices have almost doubled since the beginning of the year. Apart from this, protein-rich foods like meat, milk and eggs, whose prices normally fluctuate less, have also become more expensive. Rising global food prices have added to domestic pressures, particularly due to rising costs of imported edible oil and other commodities.

Will interest rates rise?

The central bank expects inflation to average 5.2 percent in the current fiscal year, up from its previous estimate of 5 percent. This is higher than the estimate of 5.1% in a Reuters survey conducted last month. RBI started the process of raising interest rates in October. According to an earlier Reuters survey, the RBI may raise the repo rate by another 25 basis points to 5.75% at the policy meeting in December.