Will CPI Inflation Continue to Moderate in October?
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Synopsis
As CPI inflation trends downward, economists predict a decrease to 0.4%-0.6% for October from 1.5% in September, driven by favorable conditions in essential commodities. This article explores the factors influencing this shift and the expected outcomes in the coming months.
Key Takeaways
- CPI inflation is expected to moderate to 0.4%-0.6%.
- Food inflation is decreasing, particularly in TOP vegetables.
- Retail prices of onions and tomatoes have significantly declined.
- Improved mandi arrivals are supporting lower prices.
- The inflation outlook remains stable due to favorable economic conditions.
New Delhi, Nov 7 (NationPress) According to the observed trends in essential commodities, economists indicated on Friday that CPI inflation for October is expected to further moderate to 0.4 percent-0.6 percent, down from 1.5 percent in September, aided by a favourable base.
The Bank of Baroda (BoB) Essential Commodities Index (BoB ECI) continued its downward trajectory, contracting by 3.6 percent in October and further by 3.8 percent in November (up until November 6).
“Food inflation has been decreasing largely due to ongoing deflation in the vegetable category, particularly in TOP (tomato, onion, potato) vegetables. This trend is further supported by a significant increase in mandi arrivals,” stated Aditi Gupta, Economist at BoB.
Data from the Unified Portal for Agricultural Statistics (UPAJ) reveals that mandi arrivals of tomato, onion, and potato have risen by 14.3 percent, 30.5 percent, and 23.1 percent, respectively, during the April-October period compared to the previous year.
“A similar pattern is anticipated to continue in the upcoming months as the harvesting season progresses. This is likely to introduce a notable downward bias to India's overall inflation outlook,” Gupta remarked.
Indeed, prices for TOP vegetables have shown a consistent decline this year. Onion prices fell by 51.2 percent in October, marking the steepest drop since December 2020. Retail tomato prices also plummeted by 39.9 percent in October, compared to an 8.3 percent decline in September.
Potato prices have similarly seen a steady decrease over the last seven months, with a 31.3 percent drop in retail prices in October. The CPI weighted trajectory for TOP in September has aggregated to a -29.5 percent decline.
Additionally, major pulses have also been experiencing a deflationary trend in October, with Tur dal seeing a notable decrease of 29.4 percent - the largest drop since January 2018.
“The inflation outlook appears stable, bolstered by supportive factors like GST rate rationalization and lower global commodity prices,” the report concluded.
Point of View
It is essential to recognize the ongoing trends in CPI inflation and essential commodities. The insights provided by economists reflect a broader understanding of market dynamics and consumer impact. Nation always stands committed to delivering accurate analysis and reporting on economic trends.
NationPress
08/11/2025
Frequently Asked Questions
What is CPI inflation?
CPI inflation measures the change in prices of a basket of consumer goods and services. It reflects the purchasing power of consumers and indicates economic health.
Why is food inflation decreasing?
Food inflation is decreasing due to improved supply, particularly in the vegetable category, along with favorable mandi arrivals.
What are TOP vegetables?
TOP vegetables refer to tomatoes, onions, and potatoes, which are significant components of the Indian diet and have been experiencing price drops.
How does GST affect inflation?
GST rate rationalization can lower tax burdens on goods, making them cheaper for consumers and potentially reducing inflation.
What does a benign inflation outlook mean?
A benign inflation outlook suggests that inflation rates are expected to remain stable and low, which is favorable for economic growth.
