There could be a big drop in India's retail inflation rate in October: Report

New Delhi, October 19 (IANS). India’s retail inflation is expected to decline further in October due to high base effect, fall in food product prices and recent GST reforms. This information was given in a report. The Union Bank of India report said that inflationary pressures will gradually increase in the coming months. The bank said its forecast for October consumer price index (CPI) inflation is below 0.50 percent. The Bank expects food inflation to fall sharply and remain in negative territory during the winter months as the impact of recent floods is limited. Inflation has already fallen to an eight-year low due to falling food prices and cut in GST rates. In the report, the bank cut its inflation forecast for FY26 to 2.6 percent from the earlier estimate of 3.1 percent. Inflation is likely to remain below the RBI’s target range for most of the year and may pick up slightly in the fourth quarter due to base effects, the report said. The Consumer Price Index (CPI) fell significantly in September compared to the previous month, indicating a broad moderation in price growth. During this period, the Consumer Food Price Index stood at -2.28 percent, showing that food prices are falling from June 2025. The data also showed that inflation in rural areas stood at 1.07 percent, while inflation in urban areas was slightly higher at 2.04 percent. Food inflation remained negative in both sectors (-2.17 percent in rural areas and -2.47 percent in urban areas), reflecting the impact of falling prices of vegetables and edible oils. The government attributed the decline to low prices of key food items such as vegetables, oils, fruits, grains, pulses, eggs and fuel. Economists believe that if current trends continue, India could maintain a low inflation environment through the festive and winter season, which will boost consumer demand and overall economic stability. –IANS ABS/