India’s retail inflation surged to a 14-month high in October, driven by a sharp rise in vegetable prices, curtailing expectations of an interest rate cut by the Reserve Bank of India (RBI) next month.Annual retail inflation reached 6.21% in October, exceeding the central bank’s tolerance band of 2%-6% for the first time in over a year, according to government data released on Tuesday.The October retail inflation rate was also higher than the 5.81% forecasted by economists. The RBI is tasked with keeping inflation within the 2%-6% range, with a medium-term target of 4%. In comparison, inflation stood at 5.49% in September, marking a nine-month high.Rising food prices, particularly in the vegetable sector, have eroded the purchasing power of middle-income households. This has dampened corporate earnings and is putting pressure on economic growth in Asia’s third-largest economy.The RBI has projected GDP growth of 7.2% for the financial year 2024-25. However, private economists have begun to lower their growth forecasts, citing signs of weakening urban consumption.
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