Retail inflation plunges to 8-year low of 1.54%

RETAIL INFLATION EASED to an eight-year low of 1.54% in September, owing to a favourable base and an annual decline in prices of vegetables, pulses, cereals and fuels, the National Statistics Office (NSO) said on Monday.

- MUKESH JAGOTA

The inflation rate fell well below the lower end of the Reserve Bank of India (RBI)'s tolerance band of 2%, increasing the chances of another rate cut in December. September inflation is the lowest since June 2017, when it stood at 1.46%; that is, the latest print is a 99-month low. In August 2025, the inflation stood at 2.07%.

With the latest figure, inflation for Q2FY26 averaged 1.7%, against the RBI's projection of 1.8%. RBI lowered its inflation projection for 2025-26 to 2.6% from 3.1% estimated in August.

Core inflation, however, inched up to 4.43%, primarily due to a sharp spike in precious metal prices.

HIGHER GOLD PRICES and housing costs pushed up core inflation. CareEdge Chief Economist Rajani Sinha noted excluding precious metals, core inflation remained benign at 3%.