October CPI rises to 10.09%, food price inflation at 12.56%

NEW DELHI: The Consumer Price Index (CPI) for the month of October rose to 10.09% versus 9.84% in September. The consumer food price inflation was reported at 12.56% versus 11.44% in September.

The urban inflation for the month of October came in at 10.2% versus 9.93% in September.

Commenting on the higher-than-expected CPI number, C Rangarajan of PMEAC said, "CPI at over 10% is a disturbing sign. Growth in CPI is due to a rise in food inflation."

And the wholesale price measure is forecast to be above the Reserve Bank of India's perceived 5 per cent comfort level for a fifth straight month. The RBI has raised its benchmark lending rate by half a percentage point over the previous two months.

Meanwhile, the Index of Industrial Production (IIP) for the month of September grew at below market-expectation levels of 2% versus 0.6% in August. An ET Now poll estimated that the IIP grew at 3.6%. Consensus estimate for the same ranged from 1.3% to 5.8%. The IIP for the April-September period now stands at 0.4%.

Some economists fear Asia's third-largest economy is potentially entering a stagflationary-type environment, marked by high inflation but slow growth.

Although an uptick in electricity generation, coal output and exports likely led to a pick-up in industrial output in September, overall economic growth remains subdued.