The CPI, a main gauge of inflation, edged up 1.6 percent year-on-year in September, down from a reading of 2.0 percent in August, the National Bureau of Statistics (NBS) announced on Wednesday.
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On the same time Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for the month of August 2015 stood at 4.05 percent, 3.45 percent and 3.88 percent respectively.
Eurostat figures show that Malta is the country with the highest annual inflation rates in the European Union, followed by Belgium, Portugal and Sweden, with 0.9% each. Making the fourth cut in interest rates this year, the RBI cut the repo rate, at which it lends to commercial banks, by 50 basis points last month to bring it down to 6.75 percent. The inflation rate for Fuel & Power fell further to -17.71%, the statement added.
Lower interest rates tend to boost inflation, although economists have recently warned that in the current environment cheaper borrowing costs may do little to stoke spending by businesses or consumers. He said that according to central bank estimations, inflation will stay below the minimum of the variation interval, specifically below 1.5 percent, until the early 2017.
Cumulative IIP growth in the first five months in 2015-16 at 4.1 per cent is better than the growth of 3 per cent in the same period past year.
CPI rose 0.5 percent month-on- month in September 2014, compared to a 0.1 percent growth last month.
The Reserve Bank mostly tracks the Consumer Price Index- based inflation for its monetary policy decisions.
Sustained falling prices could mean shoppers putting off purchases and firms delaying investment, while mortgages become less affordable, especially if wages drop.
The September rate was also hit by smaller-than-expected increases in the cost of clothing.
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JPMorgan Chase Asia Pacific vice chairman Jing Ulrich said September’s CPI is mainly underpinned by stable pork prices while the continuous drop of PPI reflected the weak domestic demand. However, the price of jute sacking bag (6 per cent), gunny and hessian cloth (4 per cent), jute sacking cloth (3 per cent) and jute yarn (2 per cent) moved up.
